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HSBC to offer Japan housing loans to foreigners

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London-based HSBC Group said Wednesday it will tie up with two Japanese real estate companies to extend mortgage loans to foreign residents so they can buy property in Japan more easily.

The deal was to be announced Thursday. The two partners are Mitsui Real Estate Sales Co., one of the leading Japanese real estate firms, and Ken Corp., which specializes in handling real estate for foreigners.

Under the new loan program, the group’s wealth management service, HSBC Premier, will provide financial services to those with liquid financial assets worth ¥10 million or more.HSBC started the mortgage loan service on Jan. 31, but the alliance with Mitsui and Ken will allow it to directly reach out to potential buyers here. The two real estate firms in return will get a larger base of potential customers

The new move will also help non-Japanese residents by providing English translations of Japanese contracts and guidance through the process of getting a mortgage.

But HSBC will still require that applicants have permanent residency status when extending such loans, just as Japanese banks do.

“The two real estate companies could only target customers who had cash before because it was difficult for foreigners to borrow mortgage loans from Japanese banks,” said Koichi Hori, senior vice president of mortgage products at the Hongkong and Shanghai Banking Corp. in Tokyo. “But they can borrow money now.”

The number of wealthy foreign residents has been rising, according to Ken Corp. In Minato Ward, there were more than 6,000 foreign residents in 2008, up from around 3,500 in 1998.

Besides the English support, another benefit of the loans is that the interest rates are linked to the outstanding amount of savings kept in HSBC accounts. In other words, if customers increase the savings in their accounts, overall interest payments go down. The borrowers can choose from among the yen and four other currencies in which to save money.

2 Comments

  1. ジェイソン (Jason) ジェイソン (Jason) March 9, 2009

    This is good news, as the Mrs. and I have been looking at building a house in the next few years. Once we reach that 10,000,000円 requirement, then we’ll probably start looking into it more seriously.

    We didn’t really want to get stuck with a mortgage before having at least that much in the bank to begin with 🙂

  2. Robert Robert March 19, 2009

    So, if I keep a large reserve in my bank account I will get lower interest rates? Wouldn’t it be better to pay off the loans in order to keep the costs of the interest down? I never heard of a similar system in another country, it does sound peculiar.

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