If you own an apartment in Japan, you can move its existing loan to YEN LOANS (refinance), borrow against it to take out cash without selling (equity release), or do both at once. YEN LOANS lends up to 65% of the apartment's current value from an independent valuation, or 50% for second homes, short-term rentals and loans over ¥250M, on the same terms as a purchase. Any existing loan on the apartment is repaid from the new loan.
In short
- The loan can be up to 65% of the current value, from an independent third-party valuation. The maximum is 50% for second homes, short-term rentals and loans over ¥250M.
- Loans run from ¥15M to ¥525M, and every loan is subject to an affordability test.
- The term is up to 35 years. You must be 80 or under at loan maturity, and the loan cannot run beyond 50 years from the building's construction. In an older building, that limit can set the term.
- Payments are monthly, in yen. An interest-only period of up to 5 years is available, with a 1.00% p.a. premium.
- Refinance and equity release can be combined: the new loan repays the existing one, and you receive the balance. Settlement can be completed remotely.
- Lost your title document, or moved since you bought? Tell us at the start: tracing the records can add weeks.
What is equity release on a Japanese apartment?
Equity release, often called a cash-out or a home equity loan, is a new mortgage on an apartment (condo) you already own. You keep the apartment. The loan is secured by a first mortgage over it, and you receive the loan in yen.
Refinance and equity release use the same loan as a purchase, the All Japan Tracker, on identical terms: 1-month TIBOR + 3.50%, reset monthly, with the same property and borrower rules. The full specification is on the Loan terms page. The two can also happen together: the new loan repays your existing loan, and you receive the balance.
YEN LOANS has financed owners in this position. In one case, the owner of a central Tokyo apartment released about ¥100M after refinancing the prior loan, with an initial interest-only period. In another, told in one of our published borrower journeys, a US-based owner refinanced the old loan on a Tokyo apartment let to a long-term tenant and released the rest as cash, keeping the apartment and the tenant. Figures are rounded, and a past case is not a promise of any term.
How does refinancing an existing loan work?
Refinancing (借り換え, karikae) moves the loan on an apartment you already own to a new lender, here on the same terms as a purchase.
A common situation: you bought your apartment with a Japanese home loan (住宅ローン, jūtaku rōn) while living in Japan, and you have since moved abroad, or plan to. Domestic lenders rarely refinance or release equity for non-resident owners. YEN LOANS lends by the passport you hold, wherever you live, so a non-resident owner of a qualifying apartment can refinance with us.
At settlement, the new loan repays your existing loan in full, and YEN LOANS takes a first mortgage (抵当権, teitōken) over the apartment. If the new loan is larger than what you owe, the difference is released to you as cash, less the settlement deductions: that is refinance and equity release together.
Your new loan
Up to 65% of the apartment's current value
Your existing loan
Repaid in full at settlement
Cash to you
Less the settlement deductions
YEN LOANS does not advise on whether refinancing suits you, or on another lender's terms. Before you decide, check what your current loan's terms say about moving abroad or no longer living in the property, and any charge for repaying it early, which is separate from the YEN LOANS fees on the Fees page.
How much cash can you release?
The loan can be up to 65% of the apartment's current value. The maximum is 50% for second homes, short-term rentals and loans over ¥250M. Any existing loan is repaid first. What remains, less the settlement deductions, is the cash you receive, so if you already owe close to 65% of today's value, there may be little or nothing left to release.
For an apartment you own, YEN LOANS lends against its current value. That value, the collateral value (担保評価額, tanpo hyōka-gaku), comes from an independent third-party valuation carried out after you apply. The loan-to-value ratio (LTV) is applied to that figure. Our guide to the down payment for buying property in Japan explains what an appraisal measures.
Two more limits apply. The loan must be between ¥15M and ¥525M. It must also pass the affordability test, which looks at your verified net income after tax and existing debt commitments, and can also take into account assets you hold, in Japan or abroad.
Worked example · illustrative, not a quote
You can release up to 65% of the value, minus what you still owe
Fees and the payment reserve, about 4% of the loan, are deducted at settlement, so the cash you receive is a little lower. The figures assume the affordability test allows the full loan.
The example
¥110M
Current value, from the independent valuation
¥71.5M
Loan, 65% of the value
¥30M
Still owed on the existing loan
Where the ¥71.5M loan goes
For a second home or a short-term rental, the maximum is 50% of the value: ¥55M on this apartment. The fees and reserve assume a 30-year term at a hypothetical all-in rate of 4.50%, not today's rate.
Two fees are paid at application, and the Fees page lists each amount and when it is paid.
The minimum loan also sets a floor. At 65%, an apartment needs a value of at least about ¥23.1M to support a ¥15M loan. At 50%, it needs at least ¥30M.
Does the apartment still have to qualify, and can its age set the term?
An apartment you own must meet the same rules as one you are buying. In an older building, the term limit can matter most, because a loan cannot run beyond 50 years from the building's construction.
The property rules are the same as for a purchase, including completion in 1990 or later. Our guide to which properties qualify sets them out.
The term is the shortest of three limits. It can be up to 35 years. You must be aged 20 or over at application and 80 or under at loan maturity. And the loan cannot run beyond 50 years from the building's construction.
Worked example · a building that is 26 years old
In a 26-year-old building, the loan can run 24 years at most
The building reaches 50 years in 24 years, so that limit applies unless your age sets a shorter one.
| Your age at application | Maximum term | What sets it |
|---|---|---|
| 40 | 24 years | The building reaches 50 years |
| 55 | 24 years | The building reaches 50 years |
| 65 | 15 years | You reach 80 |
The exact limit depends on the building's completion date and your date of birth. A shorter term means higher monthly payments for the same loan. Because affordability is assessed against your income, a shorter term can also limit how much you can borrow. The calculator applies the building-age cap when you enter the age of the building.
Equity release or selling: how do they compare?
Both raise cash from an apartment you own, but they work very differently. Equity release is a loan, not a sale: you keep the apartment, and if it is let, the tenancy can continue.
| Item | Equity release | Selling |
|---|---|---|
| Cash you get | Up to 65% of the value, minus what you owe, minus about 4% of the loan at settlement | The sale price, minus your loan and the costs of selling, such as agency commission |
| The apartment | You keep it, and any rent from it | It passes to the buyer, with any rent and any future change in value |
| Tax now | No sale, so no tax on a gain | Any gain is taxed, at a lower rate if you had owned it for more than five years on 1 January of the year you sell. A buyer may have to withhold 10.21% from a non-resident seller. |
| Ongoing | Monthly payments in yen at 1-month TIBOR + 3.50%, reset monthly. Full recourse to you. | No loan to repay |
| Timing | Commonly four to eight weeks from application, without traveling to Japan | Depends on finding a buyer and agreeing a completion date |
Our guide to closing on a property in Japan explains the 1 January rule for a gain. YEN LOANS does not advise on which suits you, and does not provide tax advice. How a loan, the interest on it, or a later sale is taxed depends on your circumstances and on the rules in Japan and where you live. Please ask a qualified tax adviser before you decide.
How the loan runs
How does repayment work?
The loan is fully amortizing by default, with equal monthly payments of principal and interest, in yen. You can choose an interest-only period of up to five years instead, at a 1.00% p.a. premium during that period. Separately, loans above ¥150M carry a 0.50% p.a. premium.
Interest-only: lower payments first, then a step up
An interest-only period keeps the monthly payment lower in the early years, which leaves more of the released cash available while you put it to use. Both of the equity-release cases described above began with an interest-only period.
First, up to five years
Interest only
With a 1.00% p.a. premium under our current terms. The monthly payment is lower. No principal is repaid, so the balance does not fall.
Then, the rest of the term
Principal and interest
The premium is removed and the loan amortizes at the base rate. The monthly payment steps up, because the same balance is repaid over fewer years: 19 years in a 26-year-old building.
Model both payments with the calculator before choosing it. Our guide to variable-rate mortgages in Japan shows the step with figures, including after a change in rates.
Early repayment, recourse and payments
Prepayment
Up to 10% in each twelve-month period without penalty
You may repay up to 10% of the outstanding balance in each twelve-month period of the loan without penalty, with a minimum partial prepayment of ¥500,000. Above that, a penalty applies to the amount over the threshold: 3% in year one, 2% in year two and 1% in year three. From the 37th month there is no prepayment penalty.
Full recourse
To you personally
The loan is full recourse to you personally. If a sale of the apartment did not clear the balance, you would remain liable for the shortfall.
Payments in yen
Not linked to the exchange rate
The balance and the payments are in yen and do not change with the exchange rate. If you pay from income in another currency, the exchange rate changes what each payment costs you. Rent from the apartment, if it is let, is yen income that can meet a yen payment directly. YEN LOANS does not provide currency hedging.
Collecting payments
No Japanese bank account needed
You do not need a Japanese bank account. Where the apartment is not your residence, or you do not hold a Japanese bank account, a property manager approved in advance is required. Where you have no Japanese bank account, the payment is collected from the property's management account.
How does the process work from abroad?
Refinance and equity release follow the same four steps as a purchase: inquiry and consultation, application, confirmation and documentation, and settlement. At settlement, the new loan repays any existing loan and YEN LOANS' designated judicial scrivener (司法書士, shihō-shoshi) registers the new mortgage, and the existing mortgage is discharged (抵当権抹消, teitōken masshō). In most cases you do not need to travel to Japan; the exception is a lost title document, explained below. Documents are accepted in English, Chinese or Japanese, and application to settlement commonly takes four to eight weeks. Our guide to getting a Japan mortgage from overseas sets out each step, and our guide on whether foreigners can get a mortgage in Japan covers who can borrow.
Before you apply: your title document and address records
Owners who bought years ago, or have moved since, can lose weeks here. Check both before you apply.
Your title document
Have the original to hand
To register our mortgage, the judicial scrivener needs the original title document from your purchase: the registration identification notice (登記識別情報, tōki shikibetsu jōhō) or, for older purchases, the registration certificate (登記済証, tōkizumi-shō, often called 権利証, kenri-shō). If it has been lost, the scrivener can confirm your identity instead, for an additional fee and at a meeting in person.
Your address
Must match the register
The owner's address must match the property register. If you have moved since buying, records tracing each change of address are needed. For foreign nationals who lived in Japan before 2012, these come from archived alien registration records and can take one to a few months to obtain.
If either applies to you, tell us at the start, so the documents can be requested early. In one of our published borrower journeys, a lost title document and archived address records added about six weeks.
“…to have all the property title transfer information ready to go. That’s the biggest issue.”
Outside our criteria today
What if your property does not qualify today?
We do not currently release equity from a property we would not lend on for a purchase. The main exclusions are:
Property
- Detached houses and whole buildings
- Wooden or steel-frame construction, of any age
- Buildings completed before 1990
- Hotel-condominiums, wherever they are
- Akiya and other vacant or unmanaged stock
Land and location
- Leasehold land (借地権, shakuchiken)
- Agricultural land
- Re-building prohibited land
- Properties outside our five metropolitan areas, including resort locations
Our guide to which properties qualify goes through each rule. If your property falls outside them, we would still like to hear about it. Register your interest with the property type, its location and roughly what it is worth. We log every request and come back to you if it fits, now or later.
Frequently asked questions
Can a non-resident release equity from a property in Japan?
Yes, with YEN LOANS, if you and the apartment qualify. Eligibility is by nationality, evidenced by your passport, wherever you live. No Japanese bank account, visa or residency is required. The apartment must be a strata-titled apartment in a reinforced concrete (RC or SRC) building completed in 1990 or later, in one of five metropolitan areas. Equity release is offered on the same terms as a purchase.
Can I refinance my Japanese home loan after moving abroad?
Yes, if you and the apartment qualify. YEN LOANS lends by the passport you hold, wherever you live, so you can refinance while living abroad. The new loan repays your existing loan at settlement, and any surplus can be released as cash. If your current loan is a resident home loan, check what its terms say about moving abroad or no longer living in the property, and whether it charges for repaying early. YEN LOANS does not advise on another lender's terms.
What does it cost to refinance or release equity?
Two YEN LOANS fees are paid when you apply: a commitment fee of ¥220,000 and an appraisal fee of ¥110,000. At settlement, the loan origination fee (2.2% of the loan), the loan entrustment fee, a payment reserve and stamp tax are deducted from the loan, together about 4% of it, depending on the term and rate. If you are refinancing, your current lender may also charge for repaying its loan early. The Fees page lists each amount.
Can I release equity from a house in Japan?
Not today. YEN LOANS lends only on strata-titled apartments in reinforced concrete (RC or SRC) buildings completed in 1990 or later, in five metropolitan areas, and that applies to equity release as well as purchases. Detached houses and whole buildings are excluded. If you own a house and want to raise cash against it, please register your interest: tell us where it is and roughly what it is worth. We log every request and come back to you if it fits, now or later.
Japanese terms in this guide
- 住宅ローンjūtaku rōn
- A home loan: the usual Japanese term for a residential mortgage, often made to borrowers living in Japan.
- 抵当権teitōken
- A mortgage: the security interest over a property, registered at the Legal Affairs Bureau. YEN LOANS lends on a first-priority mortgage.
- 借り換えkarikae
- Refinance: replacing an existing loan on a property with a new loan, often from a different lender.
- 担保評価額tanpo hyōka-gaku
- The collateral value a lender assigns to a property. For equity release, it is the current value the loan is based on.
- 抵当権抹消teitōken masshō
- Discharge of a mortgage: removing a repaid mortgage from the property register, usually handled by a judicial scrivener.
- 司法書士shihō-shoshi
- A judicial scrivener: the licensed specialist who prepares and files title and mortgage registrations.
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.