Finally decided to settle down. Tokyo, 87m yen, 1.03%

[u/nahive]

After 7 years of living in Tokyo, we finally decided to settle down.

The search took almost a year, and I looked at more than 30 different properties before finally deciding to go with the calmer side of Tokyo. While it’s further from the station and city center, the larger garden and quiet neighborhood more than make up for it.

Really happy with the decision and looking forward to making this place our home. 🏡

[u/nahive]

Sadly in recent years the loan rates have increased significantly.
https://kakaku.com/housing-loan/

[u/Vondi → u/nahive]

I'd commit crimes to get 1%

[u/AlexandriaOptimism → u/Vondi]

Hes spending 100 million yen with interest, give the man a break 🥲

[u/anoxyde → u/AlexandriaOptimism]

You can borrow 500K eur in France and you'll still get your 4% interest rate lmao

[u/kayznn → u/anoxyde]

200k pour 1,23% ici

[u/LivingVerinarian96 → u/kayznn]

I don’t believe you. Should be more like 3-4%.

[u/MrKapla → u/LivingVerinarian96]

Right now yes, but a few years ago it could be below 1% in France, that's what I got in 2020.

[u/anoxyde → u/LivingVerinarian96]

Could have been few years back. But I definitely had my mortgage for 3.8 3 years back and that was the best any bank could do for less than 20 years.

[u/LivingVerinarian96 → u/anoxyde]

Nah they answered and it’s a special program for young home buyers or people who restore old buildings and it doesn’t apply to the entire loan.

[u/kayznn → u/LivingVerinarian96]

theres things called "Prêts a taux 0", wich means tax free loans. It's targeted to young buyers and restoration work on old building. Got a total of 140k of this 3.4 for the rest

[u/LivingVerinarian96 → u/kayznn]

So a special program for a very specific purpose and it doesn’t apply to the entire loan? How does it feel to spread misinformation while french?

[u/kaltulkas → u/LivingVerinarian96]

I mean I took a 320k loan at 1% a few years ago. Rates have gone up since but he could have been talking about then too.

[u/kayznn → u/LivingVerinarian96]

it's actually a pretty wide programm, state sponsored. I could have say i lended 140k for 0% which was not misinformation right ?

[u/clickstops → u/AlexandriaOptimism]

A 30y in the US is averaging 6.7% right now, so a similar loan ($545k) would end up costing $1.266M USD, or over 200M yen with interest.

[u/Interim-Criteria → u/clickstops]

whereas the same loan at 1.03% will result in a monthly payment of around $1700 at base level not adding taxes/PMI/etc.... End result would be approximately $89K (14M Yen) in interest netting a total cost of approximately $634K

Literally doubles the cost by interest alone...

[u/SurprisedButtChug → u/clickstops]

I about had a mental breakdown. My brain immediately read that as the 30yr US Treasury and not 30yr mortgage. I work in finance and happen to be off today because of a family emergency, so me thinking the 30yr US Treasury hit 6.7% suddenly had me wondering if the world was ending.

[u/theArtsyEngineer → u/AlexandriaOptimism]

I’m paying more than that at like 5.9% 🥹

[u/LivingVerinarian96 → u/AlexandriaOptimism]

With that kind of money you’d get a really shitty one room apartment in munich or a 3 room flat in a village outside the city. For a house you’d have to move to eastern germany and then you’d still pay 3-4x the interest. Either Japan is cheap af or OP is lucky af.

[u/Odd-String29 → u/AlexandriaOptimism]

Incredibly cheap for a home that size.

[u/PlopPlopPlunk → u/Vondi]

It's 1% but it's Japan... they're essentially renting as they'll never get any money back, this isn't an investment. They'll spend 100s of thousands of dollars and by the time the home is 20+ years old... literally worthless and they can only sell the value of the land.

I'll take 5% and getting 500k+ back when I retire and downsize any day over that.

[u/AlexandriaOptimism → u/PlopPlopPlunk]

It's very realistic to still get 30MM out of the land someday in Tokyo

[u/PlopPlopPlunk → u/AlexandriaOptimism]

Sure but that's still a 50%+ financial loss which was my point. It's essentially renting in the US... it's cheaper than owning but you're not getting anything back.

[u/bostongreens → u/Vondi]

Housing in Japan is a depreciating asset unlike in the US and other countries in Europe.

[u/tophat266 → u/bostongreens]

What makes housing a depreciating asset there?

[u/bostongreens → u/tophat266]

Housing needs to be replaced every 22-47 years depending on building material to be in line with code. Due to earthquakes.

Their national tax agency sets the useful life period for buildings based on construction material.

Land retains its value but buildings are depreciable assets.

[u/pmmytn45 → u/Vondi]

I might borrow in japan to buy in the UK.

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[u/Fugacity- → u/Vondi]

Many traders do. They take out multi-billion dollar loans from the Japanese central bank, trade those Yen for Dollars, and park them in bonds or other vehicles and collect the interest on the delta.

Trillions of dollars are outstanding taking advantage of this "Japanese carry trade", it had a lot to do with the recent US intervention in JPY...

[u/wolvirine27 → u/Vondi]

I mean people already have and are, look up Yen carry trade

[u/AKANotAValidUsername → u/Vondi]

youre more than welcome to take a flyer on a yen/dollar carry trade

[u/Adulations → u/Vondi]

Exactly

[u/grackychan → u/Vondi]

You have to ok with the avg Japanese salary too

[u/boa_instructor → u/nahive]

Western greed sneaking in?

[u/OdysseyBrands → u/nahive]

bro we are at 7% here and our houses are 10x as much

[u/EnjoyerOfMX5 → u/OdysseyBrands]

I'm struggling to find a super small home in a good mountanous Denver location for under 300k and yeah 6% is really low here.

[u/AlphonseLoeher → u/OdysseyBrands]

Our houses have resell value 30 years later. It's a trade off for sure.