Japanese homebuyers are piling into floating-rate mortgages, stirring debate over whether they are too complacent as Bank of Japan stimulus revives inflation.
The proportion of home loans with adjustable rates climbed to 42.8 percent of Japan's new lending in February, the highest since December, according to the latest data from Japan Housing Finance Agency. The lowest variable mortgage rate at Japan's three biggest banks was at 0.775 percent, compared with a 10-year fixed rate of 1.3 percent.
Outstanding housing loans to individuals expanded to ¥113.7 trillion ($1.1 trillion), the most since at least 1974 in June as BOJ Gov. Haruhiko Kuroda's monthly sovereign bond buying aimed at ending deflation made it cheaper than ever to finance a home purchase. Borrowers like 30-year-old retail employee Eriko Brown, who chose a flexible-rate mortgage to buy a house this year, are betting rates won't rise significantly, even as global policymakers fret over how to exit from easing.