Getting Mortgage with Foreign Bank

chelseafan1708

I am sure this has been asked before, but considering Japans interest rate is 0.5% is it possible to get a mortgage with a japanese bank? if so how could I progress this further?

Cheers

Kaz2904

Not a clue I'm afraid. If it was that easy we'd all be doing it though presumably?

londonchap

I'm surprised your post hasn't generated more of a response.

Although interest rates are very low in Japan (currently 0.5% and previously 0%) there are a number of reasons why I don't think this would work:

(1) For Japanese banks, a UK property is not good security since there would be a lot of hassle involved in realising the security should the mortgagee default. Frankly, it wouldn't be worth the effort for them.

(2) Exchange rates. Two issues here - (i) you would likely pay a fee to your UK bank to convert sterling to yen each month; (ii) the risk of currency fluctations means that your mortgage could end up costing more each month (imagine you were a US investor who bought a property in the UK on a sterling mortgage...each month it gets more and more expensive to service the debt and, should you want to move the mortgage back to the US, the capital amount would effectively increase too).

For HNWIs there were some mortgages linked to the Swiss currency I believe, but I don't know much about them.

I also found this article which suggest Japanese banks are uber cautious anyway:

http://search.japantimes.co.jp/cgi-bin/fl20060912kj.html

LC

Floxxie

londonchap wrote: »

I'm surprised your post hasn't generated more of a response.

Maybe because it is on the wrong board!