Japan Mortgage Default 2026: Timeline From Month 1 to Auction

If you have missed a payment on a Japanese home loan (住宅ローン, jūtaku rōn) — or think you are about to — the first thing you actually want is not general reassurance. It is a number: how many months do I have before my options start disappearing, and how much would my payment drop if I applied for relief? This is a distinctly Japanese process. Japan has no unified, government-run loan-modification framework comparable to the US HAMP-era programs, no statutory "breathing space" moratorium like the one available to borrowers in England and Wales, and no single mortgage ombudsman. Relief instead runs lender by lender, or — for Flat 35 borrowers — through the 住宅金融支援機構 (Jūtaku Kin'yū Shien Kikō, Japan Housing Finance Agency, JHF), each with its own published thresholds, forms, and fee schedule. This guide is written for anyone who missed a payment date, received a demand letter, or was notified of subrogation (代位弁済, daii bensai) or a court-ordered auction (競売, kyōbai): what happens at each stage of delinquency, and which options are still open, laid out using primary data and the text of the law. It draws only on public statistics and figures published by Japan's Financial Services Agency (金融庁), the Japan Housing Finance Agency, individual lenders, and the courts, current as of 2026. Yen amounts below are converted to US dollars for reference only, at an assumed rate of ¥150 = US$1 (approximate, as of 2026-08) — treat the yen figure, not the dollar approximation, as authoritative.

Here is the conclusion up front. Among home-loan borrowers who applied to their lender for a change in repayment terms, 93.5% had the change approved (Financial Services Agency, 1 April 2025 through 30 June 2026). Asking for help is not a formality that quietly gets refused — national data says the opposite. That is worth pausing on if you are used to US media coverage of servicers being slow or reluctant to modify loans: in Japan's published figures, denial is the outlier, not the norm. On the other side of the ledger, once a borrower loses 期限の利益 (kigen no rieki, the "benefit of time" — the contractual right to keep repaying in monthly instalments rather than all at once), the base on which default interest (遅延損害金, enchi songaikin) is calculated switches from the single missed monthly payment to the entire outstanding loan balance, and the cost jumps by an order of magnitude. The window in which most of your options are still available closes before delinquency reaches three months.

Key takeaways

The approval rate for repayment-term modifications is 93.5%: 7,691 changes approved against 9,414 applications, with only 536 refused (Financial Services Agency).
The default rate on regional-bank mortgages is 0.163% a year — roughly one or two borrowers in every thousand, which makes this a routine event, not a rare one (Financial Services Agency, fiscal 2024).
Default interest applies to the missed instalment before you lose the benefit of time, and to the entire outstanding balance after. At 14.0% a year, 30 days of default interest on a ¥30 million (~US$200,000) balance runs to roughly ¥340,000 (~US$2,267).
Flat 35 and JHF-financed loans carry four separate hardship programs — a repayment-term extension, a temporary reduction, a bonus-payment restructuring, and a senior-borrower interest-only option — and none of them charges a modification fee.
At auction, the minimum permissible bid is 80% or more of the court-assessed base sale price (Civil Execution Act, Article 60(3)). After a winning bid, the buyer can petition for a delivery (eviction) order any time within six months of paying the purchase price (Article 83(2), same Act).

The three numbers to check first: months in arrears, debt-to-income ratio, and income decline

Before choosing a course of action, there are three numbers worth confirming for yourself. Once you know these three, the programs you can and cannot use are almost entirely determined — and, unlike in some markets, Japanese lenders will ask for exactly these figures rather than accepting a general statement of hardship.

How many months behind are you? One payment, one month, three months, and six months each open different doors

The first thing to count is the number of payments you have missed. A borrower who has missed one payment and a borrower who has missed three consecutive payments face procedurally different treatment from the lender. At one to two months behind, a change in repayment terms, refinancing, and an ordinary market sale are all still on the table. Past three months, you typically lose 期限の利益 (the benefit of time) and the lender moves to demand the full remaining balance at once — at that point your realistic choices narrow to a negotiated private sale (任意売却, nin'i baikyaku, discussed below) or a formal court-supervised insolvency procedure.

Open your bank statement or your banking app and check the last month you successfully made a payment. That single number is the starting point for every decision that follows — Japanese lenders will ask for it in the first phone call, so knowing it before you call saves a round of back-and-forth.

What is the difference between "arrears" (延滞) and "default" (滞納)?

延滞 (entai, arrears) refers to the state of simply not having made a payment on the contractual due date. It is generally used for a lag of a few days to about a month, and if you make the payment during this window, it rarely escalates into a serious problem.

滞納 (tainō, default, sometimes translated as "chronic default") refers to arrears that have persisted and become long-term. In lender practice, the point at which continued arrears trigger formal debt-preservation procedures is generally what gets labelled 滞納. The exact contractual terminology varies by lender, but what matters to you is not the label — it is the number of missed instalments. Your loan contract's 期限の利益の喪失 (loss-of-benefit-of-time) clause states exactly how many missed payments trigger acceleration to a lump-sum demand. Check that clause first, before anything else in this article.

Calculate your debt-to-income ratio and your income-decline ratio: the gateway to the JHF hardship program

Whether you qualify for the Japan Housing Finance Agency's Type A hardship program (返済特例, discussed in detail below) hinges on two ratios. The formulas are:

Debt-to-income (repayment burden) ratio = total annual mortgage repayment (JHF portion plus any private mortgage) ÷ annual income × 100
Income-decline ratio = (income two years ago − income last year) ÷ income two years ago × 100

Worked example: annual income of ¥4.5 million (~US$30,000) against total annual mortgage repayments of ¥2 million (~US$13,333) gives a debt-to-income ratio of 44.4%. The published threshold for the ¥4–7 million income band is 40%, so this borrower exceeds it. If income two years ago was ¥6 million (~US$40,000) and last year's income was ¥4.5 million (~US$30,000), the income-decline ratio is 25% — clearing the 20%-or-higher requirement as well. With both conditions met, this borrower satisfies one of the JHF's core eligibility tests. Lay your last two years of 源泉徴収票 (gensen chōshūhyō, the Japanese withholding-tax statement issued annually by an employer — roughly analogous to a US W-2 or a UK P60) side by side and you can run this calculation in five minutes.

[2026 data] How high is Japan's mortgage arrears and default rate?

The headline figure: Japan's mortgage default rate runs at roughly 0.1%–0.2% a year. In absolute terms that is a small share of borrowers, but both the Financial Services Agency and the Japan Housing Finance Agency publish figures confirming that a steady population of borrowers falls behind every single year. You are not the only one, and the data below is offered so that you can approach a lender conversation from that footing rather than from a sense of personal exception.

Regional-bank default rate: 0.163%, broken down by region

In an analytical note published in October 2025, the Financial Services Agency calculated default rates from regional banks' loan-level lending data. The figure below is the share of borrowers classified as "normal" or "requiring caution" at the end of March 2024 who had migrated down to "requiring management" or worse by the end of March 2025.

Head-office region	Default rate (fiscal 2024)
Hokkaido / Tohoku	0.226%
Kanto	0.128%
Chubu	0.163%
Kinki	0.162%
Chugoku / Shikoku	0.177%
Kyushu / Okinawa	0.169%
National average	0.163%

Source: Financial Services Agency (金融庁), "Analysis of Regional Bank Mortgage Default Conditions" (FSA Analytical Notes, October 2025). The same analysis reports that default rates rise both with longer loan terms and with higher interest rates. If you chose a term longer than 35 years and are paying a relatively high rate, it is worth recognising that this combination sits in the segment the data associates with thinner household margin — a pattern that will feel familiar to anyone who has watched long-amortisation, higher-rate mortgage cohorts in other markets underperform in stress periods.

The Japan Housing Finance Agency's non-performing loan ratio: 2.80%

For loans held by the Japan Housing Finance Agency, including Flat 35, the scale of loans in difficulty is disclosed in more granular form.

Category (fiscal 2024)	Amount	Share of total receivables
Loans delinquent 3+ months	¥68.0 billion (~US$453 million)	approx. 0.29%
Loans with modified terms	¥340.8 billion (~US$2.27 billion)	approx. 1.44%
Bankruptcy/rehabilitation and at-risk claims	¥256.1 billion (~US$1.71 billion)	approx. 1.08%
Total risk-managed claims	¥664.9 billion (~US$4.43 billion)	2.80%
(Reference) Total receivables	¥23,709.1 billion (~US$158.1 billion)	—

Source: Japan Housing Finance Agency (住宅金融支援機構), "Investor Presentation Materials, Fiscal 2025" (July 2025). The ratio fell 0.24 percentage points from the prior year. Looking only at purchased receivables (Flat 35), the ratio is 1.86%.

Notice that loans with modified terms, at ¥340.8 billion (~US$2.27 billion), are five times the size of loans delinquent three months or more. A "modified-terms" loan is one where the borrower and the Agency agreed to a change favourable to the borrower — an interest reduction, a principal-payment holiday, and so on. In other words, within the Agency's loan book, far more cases end in a negotiated change to the repayment method than end in unresolved, ongoing delinquency. The hardship programs described later in this article are not a theoretical safety net; the published loan book shows them being used at scale.

Why 2026 is proving harder: 75.0% of borrowers are on variable rates

Japan has returned to a world with a policy interest rate, and that has shifted the assumptions behind a lot of household repayment plans. The Japan Housing Finance Agency's survey of mortgage borrowers (fielded January 2026, 1,237 responses) found:

75.0% of respondents had chosen a variable-rate loan (down 4.0 points from the April 2025 survey), 14.9% a fixed-period loan, and 10.1% a full-term fixed-rate loan
73.7% expect interest rates to rise further over the next year (up 8.0 points)
52.0% answered that they either "understand interest-rate risk but feel somewhat uneasy about it," "don't fully understand it," or "don't understand it at all"

Three out of four borrowers chose a variable rate; three out of four of those same borrowers expect rates to keep rising; and roughly half say they do not fully grasp how much their payment could increase if rates do rise. That overlap is a large part of why more borrowers are running into repayment trouble now. Readers used to the US convention of long-term fixed-rate mortgages, or the UK convention of two- to five-year fixed deals that reset onto a variable rate, should note that Japan's mainstream product is the reverse: an open-ended variable rate is the default choice, and fixed-rate products are the minority option chosen mainly by risk-averse borrowers. If you want to revisit how Japanese rate types work from first principles, see the basics of Japanese home loans and how to choose a rate type.

[Month-by-month timeline] What happens at 1, 3, 6, and 12 months of arrears

The path from a missed payment to auction is determined mostly by statute and contract, not by lender discretion — and unlike the somewhat variable, case-by-case foreclosure timelines seen in many US states, Japan's process runs through a fairly uniform set of statutory milestones once it reaches court. The table below lines up, stage by stage, which notice arrives, which options remain open at that point, and the legal or documentary basis for each.

Stage	Notice received / what happens	Options still open at this point	Basis / source
1 missed payment, up to ~1 month	Phone contact, a demand letter (督促状). Default interest begins accruing	Payment, a change in repayment terms, refinancing, an ordinary market sale	Each lender's product disclosure statement (商品概要説明書)
2 months	Formal demand notice (催告書). Advance notice of subrogation (代位弁済) from the guarantee company	Change in repayment terms (93.5% approval rate), ordinary market sale	Each lender's loan contract terms / FSA, "Status of Changes in Lending Terms"
Around 3 months	Notice of loss of the benefit of time (期限の利益の喪失). Guarantee company pays the lender in full via subrogation (JHF-financed loans: JHF itself demands full prepayment)	Private negotiated sale (任意売却), Individual Rehabilitation with the home-loan special clause (住宅資金特別条項)	Each lender's loan contract terms / JHF, "Voluntary Sale Brochure," April 2026
4–6 months	Lump-sum repayment demand from the guarantee company or a debt collection agency	Private negotiated sale, Individual Rehabilitation, personal bankruptcy	As above
6 months onward	Auction petition filed, a lien (差押え) recorded on the property register, on-site inspection by a court execution officer	Private negotiated sale (in practice, up until the day before bid-opening)	Civil Execution Act (applied to mortgage foreclosure under Article 188)
Average 9.1 months after filing	Sealed-bid tender period and bid-opening. Minimum permissible bid is 80% or more of the court-assessed base sale price	Withdrawing the petition after bid-opening requires the winning bidder's consent	Courts' 2026 Data Book / Civil Execution Act Articles 60(3) and 76(1)
After the sale is confirmed	Ownership transfers once the winning bidder pays the purchase price	Securing new housing, negotiating repayment of any remaining debt	Civil Execution Act Articles 78(1) and 79
Within 6 months of payment	Window in which the winning bidder can petition for a delivery (eviction) order	Negotiating the move-out date, arranging remaining debt	Civil Execution Act Article 83(2)

1 missed payment, month 1: default interest starts, but you have lost nothing yet

If you have missed only one payment, you are still at the stage of a phone call and a demand letter. Default interest starts accruing, but you have not yet lost the benefit of time, and a change in repayment terms, refinancing, and an ordinary market sale all remain fully available. Of every option covered in this article, more of them are usable during this first month than at any later stage.

The one thing worth actively avoiding here is not answering the lender's calls. A borrower the lender cannot reach is far more likely to be treated as having no intention to repay. Simply telling the lender when you expect to be able to pay again changes the tenor of every conversation that follows — a small step that carries outsized weight in Japan's relationship-based lending culture, where continued communication is itself read as good faith.

Months 2–3: loss of the benefit of time, and subrogation

Past two months, a written notice arrives warning that the guarantee company (保証会社) is preparing to exercise subrogation (代位弁済). Subrogation means the guarantee company repays your remaining balance to the lender in a single lump sum on your behalf. Once that happens, your creditor changes from the original lender to the guarantee company, and the process shifts from instalment negotiation to collection premised on a lump-sum demand.

The "notice of loss of the benefit of time" that typically arrives around the three-month mark means exactly what it says: you have lost the right to repay in instalments. From this point, default interest is calculated on the full outstanding balance rather than the missed payment. For Flat 35 and other JHF-financed loans, there is no guarantee company in the chain — the Agency itself demands full prepayment directly. Note that the path to keeping your home through Individual Rehabilitation's home-loan special clause (discussed below) is still open at this stage.

Month 6 onward: from the auction petition to bid-opening

Once a creditor files an auction petition with the court, a lien is recorded against the property in the real estate register, and a court execution officer and an appraiser conduct an on-site inspection. How long it then takes to reach bid-opening is a figure the courts themselves publish.

Year	Average duration of real-estate execution proceedings
2023 (Reiwa 5)	8.4 months
2024 (Reiwa 6)	8.6 months
2025 (Reiwa 7)	9.1 months

Source: Supreme Court of Japan, "Courts Data Book 2026" (裁判所データブック2026). Most recently, the average time from petition to conclusion is 9.1 months. Counting from the start of delinquency, the full process typically runs to around a year and a half — though that is only an average, and individual cases can move faster. It is more accurate to think of this stretch not as "there is still time," but as a period in which one option disappears roughly every month.

After the winning bid: when does ownership change hands, and how long can you stay?

This is a point where good information is often hard to find, so it is worth walking through the statute directly.

Once the sale-confirmation order becomes final, the winning bidder pays the purchase price by the deadline set by the court clerk (Civil Execution Act, Article 78(1)).
The winning bidder acquires the property at the moment the purchase price is paid (Article 79, same Act). Ownership transfers at that instant.
The winning bidder may petition for a delivery (eviction) order any time within six months of the date the purchase price was paid. If the building was occupied by the person who had been using it under the mortgage at the time of the winning bid, that window extends to nine months (Article 83(2), same Act).

In other words, you will not be forced out the day after the price is paid — but the winning bidder has a six-month window to file for possession, and will typically use it to press for a move-out during that period. Treat those six months as a negotiating runway, not as time you are entitled to keep living in the property. Once a winning bid is confirmed, start arranging your next home immediately.

[Worked example] How much is default interest? Calculating at 14.0% a year

The most common misunderstanding about default interest (遅延損害金) is that the moment you fall behind, 14% a year applies to your entire outstanding loan balance. That is not correct. Before you lose the benefit of time, default interest applies only to the principal and interest you actually failed to pay — not the whole loan. Aeon Bank's product disclosure statement specifies the calculation as running "from the day after the contractual repayment date to the date the delinquent principal and interest is actually repaid," and Sumitomo Mitsui Trust Bank's published FAQ states the rate as "14% a year, applied to the delinquent principal." This structure differs meaningfully from a US late fee (typically a flat charge, often 4–5% of the payment) or the way arrears interest is often described in UK mortgage terms — Japan's rate is materially higher on an annualised basis, but, before default, the base it applies to is narrow.

The formula, and a quick-reference table for before you lose the benefit of time

Default interest = delinquent principal and interest × annual rate ÷ 365 days × number of days delinquent

Using an annual rate of 14.0% and a 365-day daily-proration basis, the amounts work out as follows.

Monthly payment (one instalment)	7 days late	30 days late	60 days late	90 days late
¥100,000 (~US$667)	~¥269 (~US$1.79)	~¥1,151 (~US$7.67)	~¥2,301 (~US$15.34)	~¥3,452 (~US$23.01)
¥120,000 (~US$800)	~¥322 (~US$2.15)	~¥1,381 (~US$9.21)	~¥2,762 (~US$18.41)	~¥4,142 (~US$27.61)
¥150,000 (~US$1,000)	~¥403 (~US$2.69)	~¥1,726 (~US$11.51)	~¥3,452 (~US$23.01)	~¥5,178 (~US$34.52)

For a single missed instalment, default interest itself amounts to a few hundred to a few thousand yen — a matter of single-digit US dollars. There is no need to be overly frightened of being one month late. What you should be wary of is leaving it unresolved and drifting into the next stage.

After you lose the benefit of time, the entire balance becomes the base

Once you lose the benefit of time, the whole remaining balance is treated as having fallen due, and the base for default interest switches to that balance itself. At the same 14.0% annual rate, the numbers move to a completely different order of magnitude.

Loan balance	7 days	30 days	90 days	180 days
¥20,000,000 (~US$133,000)	~¥54,000 (~US$360)	~¥230,000 (~US$1,533)	~¥690,000 (~US$4,600)	~¥1,380,000 (~US$9,200)
¥30,000,000 (~US$200,000)	~¥81,000 (~US$540)	~¥340,000 (~US$2,267)	~¥1,040,000 (~US$6,933)	~¥2,070,000 (~US$13,800)
¥40,000,000 (~US$267,000)	~¥107,000 (~US$713)	~¥460,000 (~US$3,067)	~¥1,380,000 (~US$9,200)	~¥2,760,000 (~US$18,400)

These are estimates using a 14.0% annual rate and 365-day daily proration. Losing the benefit of time is the pivot point where the base for default interest switches from "one instalment" to "the entire balance." At the identical interest rate, the amount you owe moves by several orders of magnitude. This is precisely why the three-month mark is the deadline to move quickly.

The rate differs by lender: check your own contract

You will sometimes see a blanket claim that "Japanese mortgage default interest is 14.6% a year." The figures individual lenders actually publish are not always that number. Aeon Bank publishes 14.0% a year; Sumitomo Mitsui Trust Bank publishes 14% a year for the products it covers. Your own contractual rate is printed in the "default interest" field of your product disclosure statement or your loan agreement (金銭消費貸借契約証書). If you cannot find the document, simply call the lender and ask for "the default interest rate" — they are required to tell you.

A negotiated private sale can sometimes get accumulated default interest reduced

Accumulated default interest is not necessarily fixed at its full amount forever. The Japan Housing Finance Agency's voluntary-sale brochure (April 2026) states that, for borrowers who cooperate with the procedures set out in the brochure, the Agency may in some cases be open to discussing a reduction in default interest, depending on the borrower's circumstances and the remaining debt. A cooperative posture toward the process can translate directly into better financial terms.

Option 1: Talk to your lender about a change in repayment terms — the reality behind a 93.5% approval rate

The first move is a conversation with the lender that holds your loan. The fear that "asking will just get me turned down" is what keeps a lot of borrowers from picking up the phone — but the published data says the opposite.

[Data table] Financial Services Agency: "Status of Changes in Lending Terms," home-loan borrower data

Category	Applications	Approved (A)	Refused (B)	Under review	Withdrawn	Approval rate A/(A+B)
Major banks (9 banks)	1,709	1,351	133	152	261	91.0%
Regional banks (96 banks)	7,390	6,156	386	660	825	94.1%
Other banks (77 banks)	315	184	17	21	105	91.5%
Total (182 banks)	9,414	7,691	536	833	1,191	93.5%

Source: Financial Services Agency (金融庁), "Status of Changes in Lending Terms, etc. (as of end of June 2026)." Figures cover 1 April 2025 through the end of June 2026, and the FSA updates this statistic monthly. Refusals total just 536 cases — roughly 5% of applications. There is a review process, and continuing to make payments after the change is a precondition, but the underlying fact — the large majority of borrowers who ask get some form of relief — should make that first phone call easier to place. Nothing comparable to this level of nationwide, lender-by-lender transparency is routinely published for mortgage modifications in the US or the UK, which is itself a reason overseas readers may not know this option exists, let alone that it succeeds this often.

[Comparison table] Modification fees vary sharply between lenders

A change in repayment terms sometimes carries a fee. Rather than relying on the vague, commonly cited range of "somewhere between ¥5,000 (~US$33) and ¥30,000 (~US$200)," here are the actual published figures.

Lender	Change in repayment terms	Change in rate type	Full prepayment (early payoff)
Japan Housing Finance Agency (Types A, B, C)	Free	—	—
MUFG Bank	¥5,500 (~US$37) online / ¥11,000 (~US$73) at a branch (covers term shortening, bonus-payment amount, bonus month, monthly payment date, equal-instalment ⇔ equal-principal switch)	Free / ¥11,000 (~US$73)	¥16,500 (~US$110) / ¥33,000 (~US$220) (free for JHF-affiliated home loans)
Aeon Bank	¥11,000–¥33,000 (~US$73–US$220), tax included	Free	¥55,000 (~US$367), tax included

All figures are published, tax-inclusive amounts (MUFG Bank, "Home Loan Fees Required After Borrowing"; Aeon Bank, "Home Loan Product Disclosure Statement," as of 1 June 2026). At MUFG Bank, changing the borrower is ¥16,500 / ¥33,000, and changes outside the listed categories are handled case by case. That the Japan Housing Finance Agency charges nothing at all for its repayment-method changes is a clear, quantifiable advantage for Flat 35 borrowers over borrowers at a conventional commercial bank.

Documents to bring to the conversation, and the numbers to state

Simply telling a loan officer "I'm having trouble paying" gives them nothing to work with. If you can state the following three things as numbers, the conversation moves quickly toward a concrete proposal.

How much your income has fallen: bring two years of withholding-tax statements (源泉徴収票) or tax returns, along with your own calculation of the income-decline ratio.
What you can actually afford each month: a household budget showing take-home pay minus living expenses, education costs, and any other debt repayments.
When you expect things to recover: your expected date of re-employment, an estimated treatment period, when a child finishes school — whatever underlies the length of relief you are requesting.

The review for a repayment-term change centres on whether you can sustain the new payment going forward. That means the case for why you can keep paying after the reduction matters more than the size of the reduction you are asking for.

Option 2: Flat 35 and JHF hardship menus [comparison table by type]

If you are using a loan from the Japan Housing Finance Agency (formerly the Government Housing Loan Corporation), including Flat 35, a formal set of hardship programs already exists for you. Knowing the exact names and conditions in advance makes the conversation at your lender's counter go faster, since all applications are submitted through the bank currently servicing your loan, not directly to the Agency.

Program	Who it is for	What changes	Cap	Fee
Repayment special exception (Type A)	Borrowers whose repayment has become difficult due to job loss, illness, etc., who meet the income criteria, and who can continue repaying after the change	Extension of the repayment period. Borrowers who are unemployed or whose income has fallen 20% or more may also get a temporary suspension of principal payments	Extension up to 15 years max. Principal suspension up to 3 years max. Age at final payment capped at 80	Free
Temporary relief (Type B, "naka-yutori")	A period of higher expenses is expected — tuition for further education, medical costs from hospitalisation, etc.	Reduced payment amount for a period set through consultation	Period set through consultation (payment increases once the reduced period ends)	Free
Bonus-payment restructuring (Type C)	The twice-yearly bonus-linked portion of the payment has become a burden	Changing the bonus-payment months, changing the split between monthly and bonus portions, or cancelling bonus payments entirely	—	Free
Senior repayment special exception ("Silver")	Borrowers aged 70 or older for whom no other program makes continued repayment realistic	Monthly payments reduced to interest only; the home is sold to repay the balance in full once all borrowers have passed away	Conditions include at least 20 years since repayment began; mortgage life insurance (団信) must be cancelled	Free

Source: Japan Housing Finance Agency (住宅金融支援機構), "When You Are Having Trouble With Your Monthly Payment" (updated 1 April 2026), "Repayment Method Change Menu by Type," and "Guide to Repayment Method Changes / Silver Repayment Special Exception for Borrowers Aged 70+" (April 2026). Types A and C, and Types B and C, can be combined. Combining Types A and B is limited to cases where Type A is used only for a period extension.

Eligibility conditions for the repayment special exception (Type A)

Type A requires that all three of the following apply.

Repayment has become difficult due to circumstances such as job loss or illness (this covers dismissal from a company failure, restructuring, reduced salary or bonus from a business downturn, reduced overtime pay, falling orders for the self-employed, illness or injury, or reduced income/increased expenses from caring for a family member)
One of the following also applies:
- Annual income is four times or less the total annual repayment owed to the Agency
- Monthly income is ¥64,000 (~US$427) or less per household member
- The debt-to-income ratio exceeds the threshold in the table below, and the income-decline ratio is 20% or more
Repayment can continue after the change in method

Annual income	Under ¥3,000,000 (~US$20,000)	¥3,000,000–¥4,000,000 (~US$20,000–US$27,000)	¥4,000,000–¥7,000,000 (~US$27,000–US$47,000)	¥7,000,000 (~US$47,000) or more
Debt-to-income threshold	30%	35%	40%	45%

An extension of the repayment period can run up to 15 years (50 years total across the life of the loan), but the Agency recommends "the minimum extension necessary." Stretching the term reduces the monthly payment, but total interest paid — and therefore the total amount repaid — increases. Note also that no extension is permitted that would push the age at final payment past 80. The relationship between age and loan term is covered in more detail in how age limits interact with Japanese mortgage terms.

[Worked example] How much does Type B ("naka-yutori") actually lower your monthly payment?

This is a calculation example published by the Agency itself, for a loan amount of ¥20,000,000 (~US$133,333), a 3.00% interest rate, a 35-year term, applied four years after repayment began.

Monthly payment before the reduction: ¥76,970 (~US$513)
During the 3-year reduction period: ¥50,000 (~US$333)
After the reduction period ends: ¥81,436 (~US$543)

That frees up ¥26,970 (~US$180) a month, or roughly ¥970,000 (~US$6,467) in total, over three years. But after the reduction period, the payment rises to ¥81,436, and total interest paid also increases. Whether your household finances can be back on solid footing within three years is the real question behind choosing this program. If recovery is more realistically a five-year proposition, it is usually more practical to discuss combining this with a Type A term extension.

[Worked example] Bonus-payment restructuring (Type C), and combining Types A and C

Type C is the tool for when your twice-yearly bonus shrinks or disappears. This example uses a loan of ¥20,000,000 (~US$133,333) — split as ¥14,000,000 (~US$93,333) on the monthly portion and ¥6,000,000 (~US$40,000) on the bonus portion — at 3.00% interest, a 35-year term, four years after repayment began.

Scenario	Monthly payment	Bonus-month portion
Before applying	¥53,879 (~US$359)	¥139,034 (~US$927)
Bonus payments cancelled	¥76,964 (~US$513)	¥0
Monthly/bonus split changed	¥62,707 (~US$418)	¥85,861 (~US$572)
Type C + Type A (15-year extension, 50 years total)	¥50,719 (~US$338)	¥69,385 (~US$463)

Cancelling bonus payments raises the monthly amount to ¥76,964, but you no longer face a large twice-yearly payment. If your income is in a field with unpredictable bonuses, levelling everything into the monthly payment is often easier to manage. In the combined-program example, both the monthly and the bonus-month amounts fall below where they started. If a single program is not enough on its own, it is worth raising a combination at the outset of your consultation.

Senior repayment special exception for borrowers 70+: interest-only payments, and what it costs you

For borrowers aged 70 or older for whom no other program makes continued repayment realistic, there is a senior repayment special exception ("Silver"). Monthly payments are reduced to interest only, and once every borrower named on the loan has passed away, the home is sold to repay the remaining balance in full. If the sale proceeds leave a shortfall, that shortfall is stated as not being pursued against the heirs.

The main eligibility conditions are:

Aged 70 or older at the time of application
Currently living in the financed home, with an intention to continue living there
At least 20 years have passed since repayment began
The Agency holds a mortgage lien on both the land and the building
Currently repaying without arrears
Meets a set income threshold

The trade-offs are stated explicitly as well. If you hold mortgage life insurance (団体信用生命保険, dantai shin'yō seimei hoken, group credit life insurance that pays off the loan on the borrower's death — a product with no direct US or UK equivalent, since Japanese lenders build it into the standard mortgage relationship rather than selling it as optional cover), you must cancel it before enrolling. The principal balance does not decrease, and no further repayment-method changes are available once you are enrolled. If repayment falls behind after enrolling, the Agency can demand the entire remaining balance immediately. Consent from all interested parties, including presumptive heirs, is also required — this is a program to discuss with your family before applying, not a unilateral decision. If you are reconsidering your housing situation more broadly for retirement, types of senior housing in Japan and how to evaluate them may also be useful.

Option 3: Refinancing — who can lower their rate, and who cannot

The short answer: refinancing is only realistically usable before arrears begin. Refinancing means undergoing a fresh mortgage underwriting process with a new lender, and your repayment history is part of what gets reviewed. Aeon Bank's product disclosure statement states plainly that "for a home-loan refinance, we will confirm your past repayment record." This is broadly similar to how a US or UK remortgage application will pull a credit report and recent payment history — but in Japan, unlike a market with widely used credit scores, the lender is looking directly at your relationship-specific repayment record with the current bank, which makes a recent miss much harder to explain away.

If you have not yet fallen behind, compare the following three figures using your own numbers: the reduction in total repayment from the rate difference, the cost of refinancing (arrangement fee, guarantee fee, registration costs, and so on — a percentage-rate guarantee fee can run to roughly 2.2% of the loan amount in some cases), and the payback period calculated as "cost ÷ annual savings." If the payback period is shorter than your remaining loan term, refinancing has a sound economic case.

In some cases, simply changing your rate type is enough on its own. MUFG Bank charges nothing online, and ¥11,000 (~US$73) at a branch counter, to switch from a variable rate to a fixed rate. The logical order is to check what your current lender can do for you before pursuing a refinance elsewhere. The break-even logic behind this comparison is worked through in more detail in how preferential rates work and how to judge a refinance.

Option 4: Private negotiated sale versus court auction — comparing the legal basis and the net proceeds

If a change in repayment terms is not enough to make your household finances work, the next decision is whether to give up the home. The gap between a private negotiated sale (任意売却, nin'i baikyaku) and a court auction (競売) is not a vague sense that "a private sale probably fetches more" — it is a difference built into the legal structure of each process, and understanding that structure is the single most useful thing an overseas reader can take from this article, because neither process maps cleanly onto a US short sale or a UK repossession sale.

Point of comparison	Private negotiated sale	Court auction
Who runs the sale	The seller (the debtor) chooses a brokerage and the property is sold through an ordinary real-estate transaction	A compulsory procedure led by the court
Price floor	Whatever level the creditor is willing to consent to	Minimum permissible bid = the court-assessed base sale price minus two-tenths of that price, or higher (Civil Execution Act, Article 60(3))
Costs and fees	Depending on the case, brokerage commission and lien-cancellation registration costs can be deducted from the sale proceeds before the balance is handed over	Sale proceeds are distributed among creditors through the court
Default interest	The Agency may be open to discussing a reduction, depending on the borrower's circumstances and remaining debt	No framework exists for negotiating a case-by-case reduction
Timing of hand-over	Relatively easy to adjust through negotiation with the buyer	The winning bidder may petition for a delivery order any time within 6 months of paying the purchase price (Article 83(2), same Act)
Public visibility	Circulated as an ordinary property listing	Made public through the court's official notice
Benefit of time	Applying can itself constitute a declaration that you are giving up the benefit of time	Already lost by this stage

Source: Civil Execution Act; Japan Housing Finance Agency, "Voluntary Sale Brochure (Purchase Type)," April 2026.

Why auction prices tend to run low — a legal explanation, not a rule of thumb

You will often hear that "an auction sells for 60–70% of market value." What can actually be confirmed as a matter of public record is narrower: under Civil Execution Act Article 60(3), a winning bid must be no lower than the base sale price minus two-tenths of that price (the "minimum permissible bid"). The base sale price itself is already assessed with a discount that builds in factors unique to auctions — occupancy constraints, no ability for a buyer to view the interior before bidding — and bids as low as 80% of that already-discounted figure are then permitted. That combination is the structural, legal reason auction prices run below open-market prices; it is a mechanism, not folklore (see the risks and disputes that come with buying auctioned property).

That said, the actual discount varies widely by property and location, so a single blanket multiplier is not something we would put a number on here. What actually matters for your decision is the specific figure a private sale could realistically achieve for your particular property — an individual appraisal, not a market average. The mechanics of an ordinary sale process are laid out in the steps and process of selling property in Japan.

What a private sale costs you: giving up the benefit of time, and losing your mortgage life insurance

A private negotiated sale is not all upside — it comes with explicit trade-offs. The Agency's brochure states the following.

If you apply for a private sale before the Agency has demanded full prepayment, submitting the application itself constitutes a declaration that you are giving up on continuing repayment and waiving your right to pay in instalments.
For Flat 35 (purchase type) loans where the application was received on or after 1 October 2017 and you are enrolled in the new JHF group mortgage life insurance, loss of the benefit of time is a cancellation trigger, and coverage ends as of the deadline for the full prepayment demand (you lose your mortgage life insurance). The same applies to the new-format (rate-embedded) group insurance for applications received on or after 1 October 2020.
If the proceeds from a private sale fall short of the debt owed, you generally remain liable for the shortfall unless you have been discharged through bankruptcy. That said, the post-sale repayment plan is described as being set at an amount you can realistically afford, taking your living situation into account.

The loss of mortgage life insurance coverage is easy to overlook. If you have any health concerns, this is information worth sharing with your family before you apply for a private sale.

How late can you still arrange a private sale?

Even after an auction petition has been filed, a private sale generally remains possible in practice up until the day before bid-opening. Once the winning bidder is determined at bid-opening, withdrawing the auction petition requires the winning bidder's consent (Civil Execution Act Article 76(1), applied to mortgage foreclosure via Article 188). That said, finding a buyer gets harder as the auction process advances — marketing a property takes time for viewings and price negotiation, and starting that process right before bid-opening will not leave enough runway. Treat the realistic deadline as the moment you learn an auction petition has been filed, not the bid-opening date itself.

For an Agency-financed loan, a private sale begins with submitting an "Application Regarding Private Sale," and you generally select your own brokerage. The brokerage then investigates the property and submits an asking-price confirmation request and a price appraisal. How well you as the seller cooperate — cleaning and clearing the property, accommodating viewings — has a direct effect on the final sale price.

You may also encounter a "leaseback" pitch: selling the property while continuing to live in it as a tenant. It is a structure with a number of terms worth scrutinising closely before agreeing. how leaseback arrangements work, and their risks lays out what to check.

Option 5: Choosing where to get advice [comparison table] — who to ask, what it costs, and what they can actually do

Choose an advice channel based not on name recognition, but on whether you fit the eligibility criteria and what it will cost you.

Where to go	Who it is for	What they can do	Cost
Your own lender	Any borrower	Changes to repayment terms, changes to rate type, the application window for JHF programs	Free to ¥33,000 (~US$220), depending on the lender
Japan Housing Finance Agency	Users of JHF (formerly GHLC) loans and Flat 35	Repayment special exception, temporary relief, bonus-payment restructuring, senior repayment special exception, private-sale support	Modification fees are free
Japanese Bankers Association (全国銀行協会) Counselling Service	Individuals with a banking relationship who are struggling to repay a home loan, card loan, etc. (excluding business financing)	Consultation with a specialist counsellor, and referral to other institutions where relevant	Free
Japan Legal Support Center ("Hōterasu," 法テラス, civil legal aid)	Those who meet the means test	Legal consultation with a lawyer or judicial scrivener; advance funding of representation costs	Free if you meet the means test

The phone number for the Japanese Bankers Association's counselling office is 0570-017003. Appointment bookings run Monday to Friday, 9:00 a.m. to 5:00 p.m.; consultation hours are 10:00 a.m.–12:00 p.m. and 1:00–5:00 p.m. on Mondays, Tuesdays, and Thursdays, and 10:00 a.m.–12:00 p.m. and 1:00–7:00 p.m. on Wednesdays and Fridays (closed on public holidays and bank holidays). Consultations are free and confidential — a service with a similar spirit to a nonprofit housing counsellor in the US or a debt charity in the UK, but run by the national bankers' association itself.

[Data table] Japan Legal Support Center means test for civil legal aid (as of March 2026)

If the cost of consulting a lawyer is what is holding you back, first check whether you qualify for Hōterasu's civil legal aid program. The thresholds are published.

Household size	Take-home monthly income threshold	Cap on rent/mortgage add-back	Asset threshold (cash and savings)
Single person	¥182,000 (~US$1,213) or less (¥200,200 / ~US$1,335 or less)	¥41,000 (~US$273) or less (¥53,000 / ~US$353 or less)	¥1,800,000 (~US$12,000) or less
2-person household	¥251,000 (~US$1,673) or less (¥276,100 / ~US$1,841 or less)	¥53,000 (~US$353) or less (¥68,000 / ~US$453 or less)	¥2,500,000 (~US$16,667) or less
3-person household	¥272,000 (~US$1,813) or less (¥299,200 / ~US$1,995 or less)	¥66,000 (~US$440) or less (¥85,000 / ~US$567 or less)	¥2,700,000 (~US$18,000) or less
4-person household or more	¥299,000 (~US$1,993) or less (¥328,900 / ~US$2,193 or less)	¥71,000 (~US$473) or less (¥92,000 / ~US$613 or less)	¥3,000,000 (~US$20,000) or less

Source: Japan Legal Support Center ("Hōterasu"), "Guide to Civil Legal Aid" (March 2026). Figures in parentheses on income are the thresholds used for Tokyo's special wards, Osaka City, and other "Class 1" public-assistance areas; figures in parentheses on the rent/mortgage add-back are the Tokyo special-ward thresholds. For households of five or more, add ¥30,000 (~US$200) (¥33,000 / ~US$220) for each additional co-resident.

Here is the detail that matters in practice: if you are carrying a home-loan payment, you can add that payment, up to the stated cap, on top of the income threshold. A single applicant with ¥200,000 (~US$1,333) in take-home monthly income could still fall within the threshold if their mortgage payment is ¥41,000 (~US$273) a month or more. Do not assume you are over the limit — check the number again after adding the housing-cost allowance. Note that for the representation and document-preparation aid programs, real estate and other assets are also considered, though a home that is genuinely necessary for daily living can be excluded from that assessment.

If you still cannot repay: Individual Rehabilitation and personal bankruptcy

A formal court insolvency procedure is not a step reserved for exceptional cases. Personal bankruptcy filings have risen for three straight years, and Individual Rehabilitation filings have risen for the past two.

Year	New personal bankruptcy filings	New Individual Rehabilitation filings
2023 (Reiwa 5)	70,745	9,440
2024 (Reiwa 6)	76,454	10,524
2025 (Reiwa 7)	83,255	11,415

Source: Supreme Court of Japan, "Courts Data Book 2026." Of the 11,415 Individual Rehabilitation filings in 2025, 10,753 were small-scale individual rehabilitation and 662 were rehabilitation for salaried workers. Personal bankruptcy filings bottomed at 64,982 in 2022 and have risen roughly 1.3-fold over three years.

How the home-loan special clause lets you keep your home

Japan's Individual Rehabilitation procedure includes a home-loan special clause (住宅資金特別条項, sometimes called the "mortgage exception"), which lets you keep repaying your mortgage on its original terms while other debts are reduced — a structure with real conceptual overlap with a US Chapter 13 repayment plan, though the mechanics and eligibility rules are entirely Japan-specific. It suits borrowers whose mortgage itself is manageable but who are being crushed by other debt.

That said, there are conditions under which it cannot be used — for example, if the home carries a lien other than the mortgage, or if a certain amount of time has already passed since subrogation occurred. Eligibility depends heavily on individual circumstances, so consult a lawyer or judicial scrivener to confirm whether it applies to you. The Agency itself points borrowers toward this option, stating that "those who are struggling to continue repayment because they are carrying debt beyond their JHF loan may also consider using the Individual Civil Rehabilitation Act," and recommending consultation with a legal professional.

The money question after you lose the home: tax and credit-record cleanup

Selling the property is not the end of the story. There is a tax filing the following year, and issues that will affect your future borrowing. This is a section where knowing the rules changes how much money actually ends up in your pocket.

Offsetting and carrying forward a loss on the sale of a specific primary residence

If you sell a primary residence still carrying a mortgage for less than the loan balance and realise a loss, you can, if certain conditions are met, offset that loss against other income such as employment income (損益通算). Any loss you cannot fully offset in the year of sale can be carried forward for three years starting the year after the sale.

Requirement	Detail
Ownership period	Both the building and the land must have been owned for more than 5 years as of 1 January of the year of sale
Home loan	An outstanding home loan with a repayment term of 10 years or more must exist as of the day before the sale contract date
Sale price	Must be below the outstanding home-loan balance
Cap on the offsettable amount	The home-loan balance as of the day before the sale contract date, minus the sale price
Limit on the carry-forward	Not available for any year in which your total income exceeds ¥30,000,000 (~US$200,000)
Exclusion	Sales to a person with a special relationship — a parent, child, or spouse, for example — are not eligible

Source: National Tax Agency (国税庁), Tax Answer No. 3390. One clarification on the deadline: the NTA's own Tax Answer page states "through 31 December 2025," but the fiscal 2026 tax reform extended this special provision by two years, through 31 December 2027 (Ministry of Land, Infrastructure, Transport and Tourism, "Outline of the Fiscal 2026 Tax Reform"). Confirm the most current wording before filing. Note also that replacement properties located within certain designated hazard areas are excluded from this treatment.

The ¥30 million special deduction, and debt-forgiveness income when you are insolvent

If you instead realise a gain on the sale, there is a special ¥30,000,000 (~US$200,000) deduction available on the sale of a primary residence. Regardless of how long you owned it, this lets you deduct up to ¥30,000,000 from your capital gain. For a home you had already moved out of, the sale must occur by 31 December of the third year after you stopped living there. You must also not have used this deduction, or the transfer-loss special provision above, in either of the two years before the sale (National Tax Agency, Tax Answer No. 3302).

Another point worth understanding is the tax treatment if part of your remaining debt is forgiven after a private sale or an auction. The National Tax Agency states that where a debtor has become insolvent and repayment is genuinely and significantly difficult, the portion of forgiven debt that could not realistically have been repaid is not treated as a gift for tax purposes (Tax Answer No. 4424). This does not mean debt forgiveness is automatically tax-free in every case — if your situation may qualify, confirm the details with your local tax office or a tax accountant.

[Comparison table] What CIC, JICC, and KSC record, and for how long

You will often see the blanket claim that "61 days or more, or three or more missed payments, gets recorded as a derogatory mark, and it stays on file for five years after the debt is paid off." What the three credit bureaus actually publish is somewhat more granular than that. Here is what each of the three discloses.

Bureau	Main information recorded	Retention period
CIC (a designated credit information agency)	Credit information (contract details and payment status, including payment history, whether a derogatory event occurred — arrears, guarantor payment, bankruptcy — the date it occurred, and the date arrears were cleared)	During the contract, and within 5 years after the contract ends
	Application information	6 months from the date of inquiry
	Usage record	6 months from the date of use
JICC (Japan Credit Information Reference Center)	Contract details and repayment status (contracts dated on or after 1 October 2019)	While the contract is ongoing, and within 5 years after it ends
	Arrears information (contracts dated on or before 30 September 2019)	While arrears continue; once cleared, retained for no more than 1 year from the date it occurred
	Application-related information	Within 6 months of the date of inquiry
KSC (Japanese Bankers Association's Personal Credit Information Center)	Transaction information (contract details and repayment status, including arrears, subrogation, and forced-collection proceedings)	During the contract, and for no more than 5 years from the contract end date (or, if not yet paid off, from the payoff date)
	Official Gazette information (bankruptcy, commencement of civil rehabilitation, etc.)	No more than 7 years from the date of the decision
	Inquiry-record information	Provided to member institutions for no more than 6 months from the date of use

Source: CIC, "Credit Information Held by CIC"; JICC, "Content and Retention Period of Credit Information"; Japanese Bankers Association, "Guide to the Personal Credit Information Center" (April 2026).

On KSC specifically: as of 4 November 2022, registration and disclosure of dishonoured-bill information was discontinued, and the retention period for Official Gazette information was shortened from 10 years to 7 years. Older explainer articles sometimes still cite the 10-year figure, so treat that number with caution. KSC also states that it does not register information such as a discharge decision. You can confirm exactly what is on file about you by requesting disclosure directly from each bureau — a right broadly analogous to a free annual credit report request in the US, though run through three separate Japanese bureaus rather than one centralised system.

Does a history of arrears affect your next mortgage application?

Short answer: repayment history is one factor lenders review, but it is not the dominant one. The following figures, from the Ministry of Land, Infrastructure, Transport and Tourism's fiscal 2025 survey (published March 2026), show the share of lenders that use each item in their underwriting.

Underwriting item	Share of lenders using it	Notes
Age at final payment	98.4% (978 lenders)	"Under 80" used by 716 lenders
Age at time of borrowing	96.2% (956 lenders)	—
Health status	96.1% (955 lenders)	Mortgage life insurance required by 834 lenders
Annual income	94.2% (936 lenders)	—
Years of continuous employment	93.9% (933 lenders)	"1 year or more" required by 612 lenders
Collateral valuation	91.0% (905 lenders)	Affects the lending decision at 498 lenders
Debt-to-income ratio	90.9% (904 lenders)	—
Lender's service area	89.2% (887 lenders)	—
Joint and several guarantee	84.7% (842 lenders)	—
Status of other debt (card loans, etc.) and repayment history	72.5% (721 lenders)	—

Source: Ministry of Land, Infrastructure, Transport and Tourism (国土交通省) Housing Bureau, "Fiscal 2025 Survey on the Actual State of Private-Sector Home Loans, Report of Results" (March 2026).

Only 72.5% of lenders use repayment history as an underwriting item — lower than age at final payment or annual income. Put another way, more than a quarter of lenders do not list repayment history as an underwriting factor at all. A past default does not mean you are permanently shut out of getting another Japanese mortgage.

While your credit record recovers, there are three things worth doing in the meantime. First, get a full picture of everything you currently owe, and build a track record of paying on time. Second, pay down other debt to bring your debt-to-income ratio lower. Third, save a larger down payment so the loan amount itself is smaller. Debt-to-income ratio and collateral valuation are both reviewed by roughly nine out of ten lenders — improving those two gives you real negotiating leverage the next time you apply. For the mechanics of clearing a mortgage lien once a loan is fully paid off, see the documents and steps for cancelling a mortgage registration.

Summary: an action checklist worked backward from your months in arrears

When Japanese mortgage repayment breaks down, what separates one outcome from another is not how much you know — it is when you act. Here is what you can do today, organised by how many months behind you are.

Not yet behind, or one missed payment: call your lender and discuss a change in repayment terms. Prepare two years of withholding-tax statements and a household budget. A change in rate type or a refinance are both still on the table at this stage.
2 months: get the conversation done before the subrogation notice arrives. If you have a JHF-financed loan, ask by name about the repayment special exception, temporary relief, and bonus-payment restructuring. The modification fee is free.
Around 3 months: once you lose the benefit of time, default interest switches to the entire outstanding balance. If a change in repayment terms is no longer realistic, start weighing a private negotiated sale against Individual Rehabilitation.
4–6 months: move forward with applying for a private sale and selecting a brokerage. In some cases, brokerage fees can be deducted from the proceeds, and a reduction in accumulated default interest may be negotiable.
After an auction petition is filed: a private sale generally remains possible in practice up until the day before bid-opening, but finding a buyer takes time. In parallel, start arranging your next home.
After the winning bid: ownership transfers once the purchase price is paid, and the winning bidder can petition for a delivery order within six months. Prepare for negotiations over any remaining debt, and for the following year's tax filing (offsetting a transfer loss against other income).

We at INA&Associates work daily in the practical business of selling and managing Japanese real estate, and our view is that showing the numbers plainly — including the parts that are uncomfortable — is what builds trust over the long run. Every program covered in this article is one that a public institution has published itself; none of it is proprietary or hidden. The single most expensive thing you can do is let time pass without enough information. Start with one phone call to your lender.

Frequently asked questions

Q1. Is it really fine to miss just one mortgage payment?

A single missed payment, paid promptly, rarely escalates into a serious problem. Default interest does apply, but before you lose the benefit of time it only applies to the missed principal and interest — for a ¥100,000 (~US$667) monthly payment, 30 days late at 14.0% a year, that comes to roughly ¥1,151 (~US$7.67). That said, ignoring the phone calls and demand letters will move you into the next stage. Simply tell your lender when you expect to be able to pay.

Q2. Won't a request to change repayment terms just get refused anyway?

Financial Services Agency figures show 7,691 approvals against 9,414 applications from home-loan borrowers, with 536 refused — a 93.5% approval rate (1 April 2025 through 30 June 2026). Regional banks alone approved 94.1%. There is a review process, but there is little reason to avoid asking on the assumption you will be turned down.

Q3. I am behind on a Flat 35 loan. How is it different from a bank mortgage?

Japan Housing Finance Agency loans come with formal programs — the repayment special exception (Type A), temporary relief (Type B), and bonus-payment restructuring (Type C) — and all of them are free to apply for. A repayment-period extension can run up to 15 years (with the age at final payment capped at 80), and principal payments can be suspended for up to 3 years. Borrowers 70 or older who cannot make any other program work may qualify for the senior repayment special exception. Applications go through the bank currently servicing your loan.

Q4. I heard mortgage default interest is 14.6% a year. Is that right?

It varies by lender. Published figures show Aeon Bank at 14.0% a year (365-day daily proration) and Sumitomo Mitsui Trust Bank at 14% a year for the products it covers. Your own contractual rate is stated in the "default interest" field of your product disclosure statement or your loan agreement. If you cannot find it, ask your lender directly.

Q5. If my home is sold at auction, do I have to move out immediately?

Ownership transfers once the winning bidder pays the purchase price (Civil Execution Act, Article 79). However, the bidder can only petition for a delivery order within six months of that payment (Article 83(2), same Act), and negotiations over the move-out date typically happen during that window. You will not be asked to leave the same day, but nor is this a period you are entitled to keep living there indefinitely — start arranging new housing as soon as the winning bid is confirmed.

Q6. How long does a record of arrears stay on my credit file?

It differs by bureau. CIC's credit information is retained during the contract and within 5 years after it ends; JICC's contract and repayment status information (for contracts dated on or after October 2019) follows the same 5-year-after-end rule; KSC's transaction information is retained for no more than 5 years from the contract end date (or the payoff date, if not yet paid off). KSC's Official Gazette information is retained for no more than 7 years from the date of the decision, shortened from 10 years as of 4 November 2022. You can confirm your own file through each bureau's disclosure request process.

Q7. I want to talk to a lawyer but cannot afford it. What are my options?

You may qualify for civil legal aid through the Japan Legal Support Center ("Hōterasu"). As of March 2026, the means test allows, for example, a single applicant with take-home monthly income of ¥182,000 (~US$1,213) or less and cash/savings of ¥1,800,000 (~US$12,000) or less. Critically, if you are carrying a home-loan payment, you can add that payment — up to ¥41,000 (~US$273) for a single applicant — on top of the income threshold. Do not assume you are over the limit; check again after adding the housing-cost allowance.