2025-04-03

There are no specific restrictions on foreigners purchasing real estate in Japan. Therefore, it is normal for foreigners living in Japan to take out a mortgage loan. However, for foreigners who do not have permanent resident status, the hurdles are quite high when it comes to loan approval. So, how should they deal with it?

What is permanent residence?

First, let me explain about permanent residency.

Permanent residence is one of the statuses of residence. One of its main features is that there are no restrictions on the period of stay in Japan, and there are no restrictions on occupation either. In other words, you can live your life almost like a Japanese person.

However, because of this, the application for permanent residence is subject to strict screening, and the hurdles to obtaining it are high. Criteria for obtaining a permanent residence visa include: having lived in Japan for at least 10 years, being of good conduct, having the qualifications and assets to earn an independent living, and not having been convicted of a crime or being in arrears with respect to taxes.

Mortgage and Permanent Residence

In some foreign countries, it is prohibited for a person who is not a citizen of that country to own a house or other real estate.

In Japan, however, foreigners are allowed to own real estate just like Japanese nationals. However, there are several criteria that must be met when screening applicants for a mortgage loan.

One of these criteria is that the applicant must have permanent resident status. In other words, if you do not have a right of permanent residence, it will be difficult to obtain a mortgage loan and you will not be able to own a house in your own name.

How can a person without a permanent residence permit obtain a mortgage?

However, just because you do not have permanent residency does not mean that it is totally impossible to obtain a mortgage. Although each financial institution is different, there are generally three ways.

The first is to have a Japanese spouse act as a guarantor. For example, if a non-permanent resident is married to a Japanese national, having that person (the Japanese spouse) act as a guarantor for the mortgage loan will give you an advantage in the application process.

The second method is to use a bank in the home country of the non-permanent resident. For example, if a branch of a bank in your home country is located in Japan, and you have used that bank in your home country, applying for a mortgage loan at that branch should be relatively easy to pass the screening process.

Third, prepare as large a down payment as possible. The same is true for Japanese nationals, but if you make as large a down payment as possible and reduce the amount of the loan, it will be easier to pass the screening process. Therefore, foreigners who do not have permanent resident status should follow this example and prepare as large a down payment as possible to gain the trust of the bank.

Conclusion

For a foreigner to obtain a mortgage loan in Japan, it is quite advantageous to have a permanent residence visa. However, even if you do not have a permanent residence visa, there are other ways, such as having your spouse, a Japanese national, act as your guarantor.