JHF Borrower Survey: 66.9% Chose Variable Rates, and Nearly Half Are Unsure How Much Payments Would Rise

The Short Version

On 6 November the Japan Housing Finance Agency (JHF) published the results of its mortgage borrower survey conducted in June 2026. Two-thirds of borrowers chose a variable rate and seven in ten expect mortgage rates to rise within a year, yet nearly half of variable and fixed-period borrowers say they do not fully understand how much their payments would increase if rates went up ^[1]. The fact that many borrowers expect higher rates but have not worked out what that would cost them is, in our view, the most important takeaway for prospective buyers.

What the Survey Found

Who was surveyed. The survey covered people who actually took out a mortgage to buy a home between October 2025 and March 2026. It ran from 22 June to 3 July 2026 and received 599 responses ^[1]. JHF notes that, starting with this round, it changed the research contractor, so the respondent pool and some questions differ, and the results cannot simply be compared with earlier data ^[1].

Rate type. Of the rate types actually used, variable rates accounted for 66.9%, fixed-period rates for 19.7% and full-term fixed rates for 13.4% ^[1]. For reference, under the previous contractor the variable share was 79.0% in the April 2025 survey and 75.0% in the January 2026 survey ^[2]. Because the method has changed, however, the lower figure should not be read as evidence that borrowers have started shifting to fixed rates.

Rate outlook. Asked about mortgage rates over the next year, 71.3% said they would "rise from current levels", 19.5% said they would "stay about the same", and only 3.3% expected them to fall ^[1].

Understanding of rate risk. Among variable and fixed-period borrowers, 47.8% answered "somewhat unsure whether I understand", "do not understand well" or "do not understand at all" when asked how much their repayments would increase if rates rose ^[1]. "Somewhat unsure" alone accounted for 34.5% ^[2]. On the rules for how the applicable rate is reset (such as the base-rate review rules), the same combined share was 43.4% ^[2].

How loans were chosen. 53.8% compared only one loan, the one they ended up taking ^[2]. Among borrowers who did not use Flat 35, the most common reason for choosing their loan was "low interest rate", cited by 49.2% ^[2].

Rate Hikes and Rising Prices Are Already Changing Decisions

The survey also asked about the effect of the Bank of Japan's rate increases since March 2024. 53.9% said their mortgage choices or plans had changed as a result ^[2]. Among the specific changes (multiple answers allowed), "borrowed less" was the most common at 10.2%, followed by "switched from variable to fixed" at 7.8% and "brought the purchase forward" at 7.3%. Conversely, 7.2% switched from fixed to variable ^[2].

The impact of inflation and rising home prices was larger still: 63.6% said their purchase plans had changed. The most common change was "increased the budget (borrowed more)" at 20.0%, followed by "reconsidered the location" at 17.2% ^[2]. Rate hikes push buyers to borrow less, while higher prices push them to borrow more, and buyers are facing both forces at once.

The backdrop is a real rise in rates. The Bank of Japan's policy rate currently stands at around 1.25% ^[3]. MUFG Bank raised its short-term prime rate from 2.375% to 2.625% on 2 November 2026 ^[4], and variable mortgage rates linked to it are rising accordingly.

What This Means for Buyers in Osaka

First, variable rates remain the norm, but calculate the "after" scenario first. The low starting rate is the main reason people choose a variable loan ^[2]. The issue is that 71.3% expect rates to rise ^[1], while 47.8% have not fully grasped how their payments would change ^[1]. Before signing, ask the bank to calculate your monthly payment if rates rise by one or two more steps, and check what share of household income that would take. That is more useful than looking at today's rate alone.

Second, understand the reset rules in your contract. Many variable products keep the monthly payment unchanged for five years, and cap a reset payment at 1.25 times the previous one. These only defer the extra interest; they do not waive it, and not every product uses them. In the survey, 43.4% were not confident about the reset rules ^[2], and this is one of the easiest gaps to close.

Third, compare several lenders. More than half of borrowers considered only one loan ^[2]. Banks differ widely in rate discounts, group credit life insurance coverage and fees, and the banks and terms available to foreign nationals also vary. Talking to several lenders often turns up a better fit.

Fourth, leave room in the budget. The survey shows that many people borrowed more because of rising prices ^[2]. When choosing a property in Osaka, weigh location, size and building age together, and keep the option of not stretching the budget to its limit.

Summary

Because the research contractor changed, this survey's figures should not be compared directly with earlier rounds. The overall picture is nonetheless clear: most borrowers chose variable rates, most expect rates to rise, and nearly half have not calculated what their payments would be after a hike ^[1]. No one can guarantee where rates will go, but anyone can work out their payments under different scenarios before signing. If you are considering buying a home in Osaka, please feel free to contact us. We can go through a specific property and your borrowing conditions with you and help you build a clear repayment plan.