Flat 35 Rate Falls to 3.81% in November: First Drop in Four Months, Still the Second-Highest Since 2017

Bottom line: the full-term fixed rate finally turned, but only slightly

On 2 November 2026 the Japan Housing Finance Agency (JHF) announced November rates for Flat 35, its long-term fixed-rate mortgage. The lowest rate for loans of 21 to 35 years with a loan-to-value ratio of 90 percent or less is 3.810% per year, down 0.02 percentage points from 3.830% in October and the first decline in four months ^[2][1]. Even so, this is the second-highest level since the current system began in October 2017, exceeded only by October's figure, and the rate has now stayed above 3% for six consecutive months ^[2][3]. For anyone planning to buy in Osaka with a full-term fixed-rate loan, and in particular for Chinese residents of Japan who hold permanent residency, this article lays out the November rates by category, the reasons behind them, the eligibility rules and a monthly payment example.

The facts: November rates by category

The JHF's published Flat 35 rates for November 2026 (the most common rate among participating lenders, likewise below) are as follows ^[1]:

• 21–35 years, loan-to-value of 90 percent or less: 3.810% (the range across lenders is 3.810%–5.730%) ^[1]
• 21–35 years, loan-to-value above 90 percent: 3.920% ^[1]
• 20 years or less, loan-to-value of 90 percent or less: 3.490% ^[1]
• 20 years or less, loan-to-value above 90 percent: 3.600% ^[1]
• 36–50 years, loan-to-value of 90 percent or less: 4.110% ^[1]
• 36–50 years, loan-to-value above 90 percent: 4.220% ^[1]

According to the Nikkei, both the 90-percent-or-less and above-90-percent categories fell 0.02 percentage points from the previous month, the first month-on-month decline since July, four months earlier, while the rate has exceeded 3% for six months in a row ^[3]. The Asahi Shimbun notes that 3.810% is the second-highest level since the system was revised in October 2017, behind only the 3.830% of October 2026 ^[2]. In other words, the decline is tiny and the rate remains high.

Two caveats. First, these are "most common" rates; the actual rate differs by lender, and within the same category the upper end reaches 5.730% ^[1]. Second, Flat 35 applies the rate in effect in the month the funds are disbursed, not the month of application ^[4]. Someone applying in November for a property handed over next year will get the rate of the month of handover.

The backdrop: the 10-year JGB yield fell in October

The Flat 35 rate tracks the previous month's long-term interest rate, meaning the 10-year Japanese government bond (JGB) yield ^[2]. Ministry of Finance data show the newly issued 10-year JGB yield at 3.092% on 1 October, 2.948% on 15 October and 2.817% on 30 October ^[6]. The Nikkei explains that until the end of September, long-term rates rose on concern that higher oil prices would accelerate inflation; in October, stock markets in Japan and the United States fell, money moved into government bonds seen as relatively safe, and long-term rates declined ^[3]. The Asahi likewise points out that the October fall in Japanese and US shares, led by AI-related stocks, pushed investors into government bonds and halted the rise in yields for the time being ^[2].

Put differently, this small cut reflects what happened in the bond market in October, not a change of policy. Rates from December onward depend on prices, the Bank of Japan's next move and overseas markets, and nobody can guarantee further declines.

What Flat 35 is: who can apply and on what conditions

Flat 35 is a full-term fixed-rate mortgage offered by the JHF in partnership with private lenders; the rate stays the same from drawdown to final repayment ^[4]. The main terms in the JHF's published conditions (as of 1 April 2026) are as follows ^[4]:

• Applicant: under 70 at the time of application; Japanese nationals, holders of permanent residence, or special permanent residents. In other words, foreign nationals on work, business-manager or other non-permanent visas cannot apply ^[4].
• Debt-service ratio: annual repayments on all borrowings as a share of annual income must be 30% or less for incomes under ¥4 million and 35% or less for incomes of ¥4 million or more ^[4].
• Loan amount: from ¥1 million to ¥120 million, and no more than the construction cost or purchase price ^[4].
• Loan term: in principle 15 years or more (10 years or more if the applicant or co-borrower is 60 or older); the maximum is the shorter of "80 minus age at application" and 35 years ^[4].
• Property: must meet the JHF's technical standards; floor area of at least 30 m² for condominiums and at least 50 m² for detached houses and similar ^[4].
• Use: the applicant or a relative must live there; it cannot be used for rental or other investment purposes. The JHF checks periodically, and if misuse is found the full balance becomes due at once ^[4].
• Costs: no guarantor or guarantee fee, and no fee for early repayment; the loan is available even without group credit life insurance (dantai shinyo seimei hoken) if health reasons prevent enrolment ^[4].

There is also a set of "rate-reduction menus". Under Flat 35 S, when the home meets the JHF's standards for energy efficiency, seismic resistance, accessibility or durability, the rate is reduced for the first five years: by 0.75% per year for ZEH homes, by 0.5% under Plan A and by 0.25% under Plan B. Under the points system based on household composition and home performance, a couple with one child buying a ZEH home, for example, reaches 4 points and gets a 1.0% reduction for the first five years ^[5]. Flat 35 S applies only to purchases of new or existing homes, closes once its budget is used up, and cannot be used for refinancing ^[5].

What it means for buyers

A payment example. On a ¥50 million loan over 35 years with equal monthly payments and excluding fees, the November rate of 3.810% gives a monthly payment of about ¥216,000; at October's 3.830% it is also about ¥216,000, a difference of roughly ¥600 ^[1]. With a loan-to-value above 90 percent at 3.920%, the payment is about ¥219,000 ^[1]. If Flat 35 S Plan A applies, the first five years at 3.310% cost about ¥201,000 a month ^[5]. The effect of this month's cut on the payment is almost negligible; what really moves the number is the loan-to-value ratio, the term and whether a rate-reduction menu is available.

Comparison with bank loans. MUFG Bank's November rates for new loans are 1.195% for the best variable rate, 3.89% for 10-year fixed and 4.50% for a full-term fixed loan of 31 to 35 years ^[7]. On the same ¥50 million over 35 years, the variable rate of 1.195% costs about ¥146,000 a month and the bank's full-term fixed rate of 4.50% about ¥237,000 ^[7]. Flat 35 at 3.810% is thus cheaper than the bank's own full-term fixed product but more than 2.5 percentage points above the variable rate. The variable rate is cheap today but moves with the policy rate; Flat 35 locks the rate for 35 years at the cost of paying more now. Which suits you depends on income stability, loan term and your view of future rates, and there is no single right answer.

What it means for permanent residents. For Chinese residents of Japan, the main attraction of Flat 35 is that the screening criteria are public and do not hinge on the size of your employer: you can apply if you are a permanent or special permanent resident, meet the debt-service ratio and the property meets the technical standards ^[4]. Those on work visas must instead use a bank's own loan, whose conditions vary by bank. If you plan to apply for permanent residency, Flat 35 is worth keeping in mind as one option once it is granted.

Not available to overseas buyers or for investment. Flat 35 requires the applicant or a relative to live in the property and cannot be used for rentals ^[4]. Buyers living abroad who are purchasing as an investment will need other financing or their own funds.

Summary

The Flat 35 rate for November is 3.810%, down 0.02 percentage points from October and the first decline in four months, yet still the second-highest since 2017 and above 3% for six straight months ^[2][3][1]. The change comes from the fall in long-term rates in October and does not mean rates have peaked ^[3]. For anyone preparing to borrow, time is better spent checking whether you meet the eligibility rules, whether a rate-reduction menu applies, and running the monthly payment under both a fixed and a variable scenario. If you are considering buying in Osaka, please contact us; we can work through the feasibility of Flat 35 and bank loans together, based on the specific property, your residence status and your finances.