Mortgage Payments Cut in Half!? Japan Mortgage Corporation Launches 'Home Residual Value Loan (Refinance)'

As interest rates continue to rise, homeowners are facing increasing mortgage repayment burdens.

Recognizing that many borrowers struggle with high monthly payments and are nearing retirement, Japan Mortgage Corporation (Lender Registration Number: Kanto Finance Bureau Director (2) No. 01528) has developed an innovative refinancing product: the 'Home Residual Value Loan (Refinance)', applying the concept of residual value loans to residential mortgages.

What is the 'Home Residual Value Loan (Refinance)'?

This is a new mortgage refinancing system where 50% of the land's appraised value is set as the 'residual value', and only the portion excluding this residual value must be repaid.

※ For condominiums, 30% of the market price is set as the residual value.

The portion equivalent to 50% of the land's appraised value (residual portion) does not require repayment. Additionally, the remaining loan amount can be repaid up to age 80, potentially reducing monthly payments to about half of current levels.

Three Options After Reaching Residual Value (Free and Secure Options)

Once the residual value is reached or the option exercise age (up to age 80) is attained, borrowers can choose one of the following three repayment methods. (Note: 10 years of principal and interest equal repayment is required to qualify.)

[Interest-Only Payment Option] Switch to a reverse mortgage-style home loan, paying only the interest on the residual value amount, further reducing monthly payments.

[Property Buyback Option] Our designated real estate company will purchase the property.

At residual value maturity, we guarantee a buyback at the land appraisal value determined at the time of financing (residual value portion).

Even if land prices fluctuate, the guaranteed residual amount remains unchanged, so there are no additional costs.

(If principal and interest repayment continues after reaching residual value, the buyback amount will be based on the outstanding loan balance. Terms differ for condominiums.)

[Continue Repayment as Is] You may continue principal and interest equal repayment until full repayment.

Key Difference from Automotive Residual Credit Loans

Typically, with automotive residual credit loans, vehicle damage, dents, or modifications can lead to repair costs or reduced appraisals. However, this loan focuses on land value, so the condition of the home does not affect the buyback. When exercising the [Property Buyback Option], our designated real estate company guarantees a buyback at the land appraisal value set at financing (residual value portion). Even if land prices fluctuate, there are no additional costs (after residual value maturity, buyback is based on loan balance).

Eligibility Requirements

- The borrower of the existing mortgage and the applicant for this refinance must be the same person

- No arrears in the last 12 payments of the current mortgage

- No illegal renovations or additions

- The refinanced mortgage amount must be ¥160 million or less and within 100% of the existing mortgage balance

- The current mortgage must not be a renovation or investment loan

- The property must not be rented out

The applicable interest rate is not the rate at application, but the rate on the actual borrowing date. Rates are reviewed monthly. Loan applications are subject to our internal review, and we may not be able to accept all requests. The degree of repayment reduction is an example and may vary based on borrowing conditions, property valuation, and review results.

Company Overview: Japan Mortgage Corporation

Japan Mortgage Corporation is a specialized financial institution jointly established by four major Japanese homebuilders and a leading finance company. We provide optimal home loans tailored to each customer's life plan, supporting the realization of their dream homes.

Corporate Name: Japan Mortgage Corporation (The Mortgage Corporation of Japan, Limited. Abbreviation: MCJ)

President & CEO: Naohiro Ando

Established: May 2003

Investors: Japan Long Group Corporation (Investors of Japan Long Group Corporation) Sekisui House, Ltd., Daiwa House Industry Co., Ltd., Sumitomo Forestry Co., Ltd., Sekisui Chemical Co., Ltd.,

Mitsubishi HC Capital Corporation

Lender Registration Number: Kanto Finance Bureau Director (2) No. 01528, Member of Japan Finance Association No. 003413

Contact: Public Relations Department, Japan Mortgage Corporation

9F, Shinjuku Mines Tower, 2-1-1, Yayoi, Shibuya-ku, Tokyo 151-0053

TEL: 03-6701-7689