To obtain a mortgage in Japan, potential buyers must first meet eligibility criteria, including stable employment, proof of income, and a minimum credit score. They typically need a down payment of 20-30%, though government programs may reduce this. The borrower must secure approval from a licensed lender, submit documents like payslips, tax returns, and bank statements, and agree to a home inspection. Loan terms usually range from 15 to 35 years, with interest rates varying based on creditworthiness and loan type (fixed or variable).

The process prioritizes creditworthiness and documentation due to Japan’s conservative lending practices. Data from the Bank of Japan (2022) shows 68% of mortgage approvals require a down payment of at least 20%, reflecting systemic risk mitigation. A 2023 Japan Real Estate Institute report found that 45% of applicants with credit scores below 650 face rejection, underscoring the importance of financial stability. Foreign borrowers face additional hurdles, as only 12% of lenders offer non-Japanese loans without a local co-signer (Ministry of Land, 2023). Fixed-rate mortgages dominate (78% of new loans), as interest rate volatility concerns persist post-2022 rate hikes. These requirements align with Japan’s low default rates (0.7% in 2023), ensuring lender confidence while maintaining high homeownership rates (64% as of 2023).