With YEN LOANS, your down payment is at least 35% of the purchase price, or at least 50% for second homes, short-term rentals and loans over ¥250M. It is higher if the independent valuation comes in below the price, because the loan is based on the lower figure. Purchase costs and fees come on top, so plan your cash for all of them from the start.
In short
- YEN LOANS lends up to 65% of the independent valuation, with the purchase price as a ceiling. That is a maximum loan-to-value ratio (LTV) of 65%, so the minimum down payment is 35% of the price.
- The maximum LTV falls to 50% for second homes, short-term rentals and loans over ¥250M.
- Loans run from ¥15M to ¥525M, and your income and existing debts can cap the loan below the LTV maximum.
- On a ¥60M apartment valued at ¥54M, the illustrative cash needed is ¥24.9M before fees and costs, not the ¥21M that 35% of the price suggests.
- In competitive markets such as central Tokyo, the appraisal can come in below the price, so keep cash for the gap.
- The Fees page puts the one-off costs of buying at typically around 6–8% of the price, on top of the down payment.
- All in, at 65% LTV, plan for about 44–46% of the price in cash: the down payment, YEN LOANS' fees, the two application fees and purchase costs. At 50% LTV, about 59–61%.
How much of the price do you need to pay in cash?
You need at least 35% of the price, or 50% for second homes, short-term rentals and loans over ¥250M. If the valuation is below the price, you pay 35% of the valuation plus the gap between the valuation and the price.
How the price splits, when the valuation matches it
Shares of the purchase price. Typical one-off purchase costs of 6–8% of the price come on top of the down payment. The minimum loan is ¥15M.
These figures come from the LTV, which is the loan divided by the value of the property. YEN LOANS lends up to 65% LTV on a qualifying apartment (condo), measured against an independent third-party valuation. The part of the price the loan does not cover is your down payment (頭金, atamakin). So a 65% LTV means a down payment of at least 35%.
These are the published maximums in our loan terms. You may borrow less, as long as the loan is at least ¥15M. The rate formula, 1-month TIBOR + 3.50%, is the same whatever your down payment. A loan over ¥150M carries a 0.50% p.a. premium, so a larger down payment that keeps the loan at ¥150M or less avoids it.
Three worked examples on a ¥60M apartment
The same price can need very different amounts of cash. The figures below are illustrative, not a quote. They assume the loan is not capped by the affordability test, which looks at your income and existing debt commitments.
Worked example · illustrative, not a quote
Every ¥1M the valuation falls short of the price adds ¥650,000 to the cash you need
On a ¥60M apartment valued at ¥54M rather than at its price, that is ¥3.9M more cash. Figures before fees and purchase costs.
In example B, the cash has two parts: 35% of the ¥54M valuation (¥18.9M) and the ¥6M gap between the valuation and the price. Example C is the same apartment bought as a second home, where the maximum LTV is 50%.
On top of the cash in each example, allow for fees and purchase costs. Two YEN LOANS fees are paid at application. The fees and payment reserve due at settlement, about 4% of the loan, are deducted from the loan, so less of it reaches the seller: at 65%, your own funds come to about 37.5% of the price rather than 35%. Added together with purchase costs, this is the cash to plan for.
Worked example · illustrative, not a quote
All in, at 65% LTV, plan for about 44–46% of the price in cash
The 35% down payment, the fees deducted from the loan, the two application fees and purchase costs of 6–8% of the price. At 50% LTV, plan for about 59–61%.
The example
¥60M
Purchase price, with the valuation at the same amount
¥39M
Loan, 65% of the valuation
Your cash, all in
| Item | Amount |
|---|---|
| Down payment (35% of the price) | ¥21M |
| Fees and payment reserve deducted from the loan (about 4% of the loan) | ¥1.5M |
| Commitment fee and appraisal fee, paid at application | ¥330,000 |
| Purchase costs (typically 6–8% of the price) | ¥3.6M–¥4.8M |
| Your cash, all in, about | ¥26.4M–¥27.6M |
That is about 44–46% of the price. The payment reserve assumes a 30-year term at a hypothetical all-in rate of 4.50%, not today's rate. If the valuation comes in below the price, add the gap, as in example B. Our guide to closing on a property in Japan shows the full settlement statement.
Why can the appraisal come in below the price?
The loan is sized on the lower of the appraised value and the price in your purchase contract. If the appraisal comes in below the price, you fund the difference in cash.
When you apply, you pay an appraisal fee, and the property is valued by an independent third party. This collateral value (担保評価額, tanpo hyōka-gaku) is the figure the LTV is applied to. If it comes in above the price, the price sets the limit instead. The purchase price is a ceiling, so we do not lend against a value higher than what you are paying.
How a Japanese appraisal reaches a value
A formal appraisal values the property in more than one way and reconciles the results. It is carried out by an independent third party, not by YEN LOANS. Three approaches are used, and for an apartment you live in, the first usually carries the most weight.
Usually the most weight
取引事例比較法 · torihiki jirei hikaku-hō
Sales comparison
What have similar apartments sold for?
What similar apartments nearby have recently sold for, adjusted for differences such as size, floor, age and condition. Location and walking distance to a station carry real weight, and they are also part of our eligibility rules.
収益還元法 · shūeki kangen-hō
Income approach
What rent could it earn?
The value implied by the rent the property can reasonably earn.
原価法 · genka-hō
Cost approach
What are the land and building worth?
The land value plus the depreciated cost of the building.
Reconciled into one appraised value. This is the figure the LTV is applied to.
In the cost approach, land is valued from recent comparable land sales and published benchmarks: the official land price (地価公示, chika kōji) that the Ministry of Land, Infrastructure, Transport and Tourism publishes each year, and the roadside land price (路線価, rosenka) that the National Tax Agency publishes each year (site in Japanese) for tax purposes, which lenders often use as a reference. A building is written down over an expected usable life that depends on how it is built, and reinforced concrete (RC) and steel-reinforced concrete (SRC) buildings last far longer than wooden or light steel-frame ones.
What matters to a lender is the building's remaining life, because that is how long the security holds its value. This is one reason lenders look closely at construction and age. YEN LOANS lends only on RC and SRC apartments completed in 1990 or later, and a loan cannot run beyond 50 years from the building's construction.
Why Tokyo prices can run ahead of the appraisal
Even a sales comparison can come in below the price you agree. It is based on completed sales of comparable apartments, adjusted for their differences, and checked against the income and cost approaches. Where demand is strong, as in central Tokyo, competition and scarcity can push the price of a particular apartment above what those sales support. Overseas buyers also weigh exchange rates and their wider portfolio, which the property's value as security does not reflect.
So an appraisal below the price is not the lender being difficult. It is the appraisal doing its job: measuring what the property is worth as security, not the top of the market. Once you expect it, you can plan for it.
Loan size limits
How do the ¥15M minimum and ¥525M maximum affect you?
YEN LOANS offers loans from ¥15M to ¥525M. The minimum matters most for smaller purchases.
Below ¥15M
Not offered
¥15M to ¥250M
Up to 65% LTV
¥250M to ¥525M
Up to 50% LTV
Above ¥525M
Case by case
At the bottom: the ¥15M minimum
The lowest property value that supports a ¥15M loan:
- At 65% LTV ¥15M ÷ 65% About ¥23.1M
- At 50% LTV ¥15M ÷ 50% ¥30M
Below those values, the maximum loan falls under ¥15M. For example, an apartment valued at ¥20M supports at most ¥13M at 65%, which is below the minimum, so we cannot offer a loan on it.
At the top: the largest loans
50%
At the top end, a loan over ¥250M is limited to 50% of the value. The largest loans therefore need a large down payment. Loans above ¥525M are reviewed case by case.
If your loan would be below the ¥15M minimum, or the property falls outside our eligibility criteria, you can register your interest. We will let you know if this changes.
Can your income cap the loan below the LTV maximum?
The LTV sets the most we will lend against the property. The affordability test can set a lower figure.
YEN LOANS assesses affordability against your verified net income after tax and existing debt commitments, in line with its lending criteria, and can also take into account assets you hold, in Japan or abroad. If that test supports a smaller loan than the LTV allows, the smaller figure applies and your down payment is larger. The loan term matters too. A term cannot run beyond 50 years from the building's construction, and you must be 80 or under when it ends. An older building or an older borrower can mean a shorter term and higher monthly payments.
Our calculator gives an estimate against a property value and a separate estimate from your income. Use both before you agree a price. Each is an estimate, not an offer, and the final amount depends on credit assessment and valuation.
Your loan is the lower of two limits: the maximum LTV on the valuation (capped by the price), and what your income supports.
The price
In your purchase contract
Your loan
The lower of the two limits
Your down payment
Fees and purchase costs come on top
When is the cash due?
Your cash leaves your account in stages. Most of it is due at settlement, but some is paid earlier and some later.
At inquiry
No fee
There is no fee for an inquiry. You complete a short intake form and receive a preliminary indication, typically within 24 to 48 hours.
When you sign the purchase contract
Commonly 5% to 10% of the price
In a Japanese purchase, the buyer usually pays the seller a contract deposit (手付金, tetsukekin) when signing. It is commonly around 5% to 10% of the price. The amount is agreed with the seller and is normally counted toward the price. Ask your agent how much it will be and when.
When you apply
Two YEN LOANS fees
Two YEN LOANS fees are payable at application: the commitment fee and the appraisal fee. The amounts are on the Fees page.
At settlement
The balance of the price
At settlement, the seller is paid in full through escrow. Your down payment makes up the part the loan does not cover, and YEN LOANS asks you to transfer your own funds a few days before settlement. The remaining YEN LOANS fees are deducted from the loan proceeds: the loan origination fee, the loan entrustment fee, a payment reserve and stamp tax. Together they come to about 4% of the loan. They are not a separate payment on the day, but they reduce the amount of the loan paid to the seller. The seller must still be paid in full, so your own funds cover the difference.
Purchase costs
Set by law or by others, not by YEN LOANS
After purchase
Months later, then every year
After purchase, you pay the YEN LOANS loan maintenance fee of ¥39,600 a year with your monthly payments, the annual fixed-asset and city-planning tax, and the building's monthly management and repair-reserve charges. This is not tax advice. Your agent and a qualified Japanese tax adviser can confirm the figures for your own case.
You also meet the standard costs of buying (諸費用, shohiyō). The Fees page gives the standard rates for each.
“There were no surprises. The first email I received from [the YEN LOANS team] was clear and transparent, and all the fees were clearly explained.”
Checklist
How do you plan for an appraisal gap?
Frequently asked questions
What is the minimum down payment to buy property in Japan as a foreigner?
With YEN LOANS, at least 35% of the purchase price. The maximum loan is 65% of an independent valuation, and never more than the price. For second homes, short-term rentals and loans over ¥250M, the maximum loan is 50%, so the down payment is at least half. If the valuation comes in below the price, the down payment is larger. Other lenders set their own limits. Our guide on whether foreigners can get a mortgage in Japan covers who can borrow.
Who pays for the appraisal, and when?
The borrower pays an appraisal fee of ¥110,000, including consumption tax, when the application is submitted. A commitment fee is payable at the same time. The property is then valued by an independent third party. The Fees page lists every fee and when it is paid.
Is the down payment the same as the contract deposit?
No. The contract deposit (手付金, tetsukekin) is paid to the seller when you sign the purchase contract, and is normally counted toward the price. The down payment (頭金, atamakin) is the whole part of the price that the loan does not cover. The contract deposit is therefore usually the first part of your down payment, and the rest is paid at settlement.
Can I send my down payment from overseas?
Yes. You do not need a Japanese bank account. YEN LOANS asks you to transfer your own funds a few days before settlement. Transfers from overseas banks can be delayed, or reduced by intermediary-bank charges, for reasons outside YEN LOANS' control, so send your funds early and allow for charges. The contract deposit is usually paid to the seller earlier, when you sign the purchase contract, so ask your agent how and when it should be paid.
Can I use equity in another Japanese property as my down payment?
Tell YEN LOANS at the start. YEN LOANS offers refinance and equity release on a qualifying apartment you already own, on the same terms as a purchase, and the apartment must meet our property criteria. Whether released funds can go toward another purchase depends on credit assessment, and the affordability test looks at all your existing debt commitments, including any loan you already have. Our guide to refinancing or releasing equity from a Japanese apartment explains how it works.
Japanese terms in this guide
- 頭金atamakin
- The down payment: the part of the purchase price the buyer pays from their own funds rather than from the loan.
- 担保評価額tanpo hyōka-gaku
- The collateral value a lender assigns to a property: the figure the loan is based on, as distinct from the purchase price.
- 取引事例比較法torihiki jirei hikaku-hō
- The sales comparison approach: valuing a property from recent sales of similar properties nearby, adjusted for their differences. For apartments it usually carries the most weight.
- 路線価rosenka
- The roadside land price published each year by the National Tax Agency for inheritance and gift tax, often used as a reference when valuing land.
- ローン特約rōn tokuyaku
- A financing contingency in a purchase contract. It lets the buyer cancel and recover the contract deposit if the mortgage is not approved by an agreed date.
- 諸費用shohiyō
- Purchase costs: the agency commission, taxes, registration and professional fees, and insurance paid on top of the price.
- 手付金tetsukekin
- The contract deposit paid to the seller when the purchase contract is signed, normally counted toward the price.
Written by Kyle Steele · Reviewed by Mark T. Drabkin, Representative Director & CEO · Last reviewed .
YEN LOANS K.K. is a money lender registered with the Tokyo Metropolitan Government under the Money Lending Business Act (MLBA), license Governor of Tokyo (1) No. 31998. This article is general information, not financial advice, and is not an offer of finance. Worked examples are illustrative. Rates are indicative, reset monthly, and subject to credit assessment and security review. Effective annual rate (実質年率) within 14.6%, calculated on the principal net of fees; late-payment charge up to 20.0% p.a. All loans are full recourse to the borrower. Applications are subject to careful review and may be declined. Please check the terms of your agreement and borrow within your means. 慎重な審査の結果、お申込みの意に沿えない場合がございます。ご契約内容をご確認のうえ、ご利用は計画的に。 Full product terms are set out under Loan terms, all costs under Fees, and the approved Japanese disclosure under 貸付条件の表示.