Does anyone know if UK citizens living outside Japan can qualify for a Japanese loan?

The reason I ask is that a friend has received some promotional material whereby the sender is offering to provide details on how to get loans at 0.5% in Japan in exchange for £100*. My friend doesn’t own property in Japan, but would be interested in taking a loan if it could be secured at that rate. (He feels it would be worth taking the risks associated with exchange rate fluctuations.) I would too!

Is it possible to get cheap Japanese loans without having anything in Japan to secure them against?

Any information you have on this and the sort of rates that would actually be offered will be much appreciated.

* I realise the last thing my friend should do is part with the £100.

We offer Foreign Currency Managed loans through the likes of Barclays, Fortis, Lloyds, Investec and ECU Group, to mostly property portfolio clients. But you will find most of these (with the exception of ECU) are staying well clear of Yen.

The reason being is that if you take on a mortgage at 100,000GBP today (Yen exchange rate is 238.01 to the pound) you will have a loan equivalent of 23,801,000 Yen.

If the Yen falls to say 222, like it did in March this year your current mortgage equivalent has now gone up to 107,211.71 a rise of 7,000GBP in 6 months.

Ok, i appreciate that it can go the other way, but the Jap Yen is the most volatile currency in the market place and unless you seek a Foreign Currency Risk Manager who will monitor and switch on you or your friends behalf you are walking on very thin ice and could end up losing the property.

Most banks put a 15% swing cap on foreign currency mortgages, but if this is a Yen only mortgage then the lender would more than likely foreclose and want their money back, if it was a switching mortgage they would automatically switch the loan back into GBP.

Therefore my advice is to stay clear of Yen unless it is part of a Managed Switching Mortgage, there are other currencies out there such as Swiss Franc's which is very closely correlated between the Euro and the Pound and has an interest rate of 3.005% saving almost half of the rate in the UK for a far lesser risk.

Also, most brokers or IFA's will give you advice for free and take a small commission from the arrangement fee you pay to the mortgage company.... Never pay anyone up front for advice on mortgage or financial products.

If you need more info, do not hesitate to PM me.

Thanks OFS Spain

Friend was/is looking to find out about unsecured lending from Japan that he, as a Brit living in the UK, can obtain. I realise that unsecured lending will also carry the risks you mentioned (specifically the volatility of the currency) and am confident that Japanese lenders would be even more hesitant about providing such a loan than they are about Yen only mortgages.

Do you know of any providers in Japan that provide unsecured loans for people like my friend?

When I spoke to him at the weekend I mentioned Swiss mortgage as being something to look into. (I was aware that it may be a better option, but I hadn’t looked into them before.) I will now following your suggestion.

Soup, I agree with OFS Spain's comments. I know people that have used ECU for large managed foreign currency loans and it has proved to be a good decision when compared to a GBP mortgage. I used to deal with consumer loan securitisations in Japan and all I'll say is that you don't want to miss too many payments!

Soup,

You can get yen mortgages through several lenders (Conti, Lloyds International) and will pay typically 2.1% interest rates. LTV is a max of 80% with Lloyds. Of course, all lenders have the usual arrangement fees etc. which are higher than you would see than with sterling loans.

You know about the currency risk so I won't go on about that here. I'm paid in yen as I work in Japan so that's not an issue for me in paying back a yen mortgage. What IS an issue for me is the overall fall in the yen over the last year from about 195 to 239 today - which has hugely reduced my earnings in sterling terms. OUCH!!

Cheers,

John

rule of thumb, get mortgages in the currency you earn in, if you don't all your doing gambling on currency movements...

If you want to gamble on currency movements start small and do it with a currency trading platform such as oanda

Thanks all, but I'm not looking to find out about Japanese mortgages, I'm looking to find out about unsecured loans in Japen and whether a Brit, based in Britain, can get one without it being secured against property or any other asset. If that is possible I'd be interested in finding out about lenders / typical rates offered.

Im sure you can... but its a massive risk, the rate your offered is unimportant due to currencly fluctuations. A currency trading platform would allow you to take a 'loan' in any currency you liked for any amount, you get a much better exchange rate and i suggest you go down that path if you want a dabble..

Taking a loan, in another currency is never worth the risk, there are much better more lucrative alternatives

I am quite interested in investing in Japaneese property. How easy is it to get a BTL loan in Japan. There is not much info out there on the net which is a good sign as the market is just starting to grow again and main stream investors have not gone on the bandwagon yet.