Japan banks to up variable housing loan rates for 1st time in 6 yrs.
Japan's three largest banks said Friday they will raise a variable housing loan rate by a quarter percentage point to 2.625 percent in October, the first increase in six years.
The hike comes after the Bank of Japan increased the unsecured overnight call money rate target to 0.25 percent from zero in July for the first hike in six years.
The Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corp. will apply the new rate to new loans to be extended in and after October. On existing variable-rate housing loans, the higher rate will be levied from January.
The variable housing loan rate is linked to the short-term prime lending rate and reviewed biannually. The banks raised their short-term prime lending rate in August.
As for fixed housing loan rates that are reviewed every month, Sumitomo Mitsui will lower rates on loans fixed for 10 to 30 years due to the benchmark long-term interest rate's downtrend since July. Mizuho Bank will also cut rates on loans fixed for two to 20 years.
But the Bank of Mitsubishi-Tokyo UFJ will leave fixed housing loan rates unchanged.