JJapan Finance

How do you choose a bank for mortgage?

  • October 14, 2025

Besides the lowest interest rate, is there any other factors I should consider? I've made an offer for a house in Tokyo and I applied for pre-approvals with Shinsei and PayPay bank. Shinsei offers 0.68% which drops to 0.59% if you open a Hyper Deposit account (I applied already). PayPay offers 0.63% that drops to 0.56% if you get a softbank mobile plan and 0.5% if you get Softbank Hikari and Electricity as well. I'm thinking of going with PayPay bank (I'll apply for mobile, hikari and electricity to get that 0.5%). But is there any other factors I might be missing here? Less aggressive rate adjustments every time BoJ hikes the central interest rate? Any other hidden costs or things I might want to consider?

by muku_

9 comments

  1. One that is partnered with your workplace – that way you get better rates and more chance of acceptance. Most major lenders have such partnerships. My workplace has 3 or 4 options: Mizuho and Prestia being two I can recall.

  2. A warning about PayPay’s pre-approval: as they do minimal screening at that stage it doesn’t mean much. I got pre-approved for PayPay but then they rejected my final application without recourse. Luckily I applied with a local bank too who gave me the best rate they could offer (which was a bit worse than paypay’s). 

  4. Have you gotten SBI approval yet? I got it from the agent, their rate was higher so I cancelled lol

  5. 0.1% difference feels a lot, but check how much it changes your monthly payments before you make any decisions based on it

  6. Be careful about PayPay, they don’t have 5year/125% rule.
    I can recommend SBI Sumishin, any Mega bank, or local bank (I got a pretty good interest rate from Yokohama Bank once)

  7. Lowest interest rate that would accept you for the loan amount you are seeking with a downpayment amount you can accept.

  8. Other things besides interest rates –
    1) The insurance package:
    Most have insurance that you must include if they give you the loan. Oftentimes you can choose the insurance package but even the most basic option adds a few 0.1%s to your interest rate (or else you pay for the package separately).

    2) The upfront fee. For most banks this fee is the same (percentage of your loan amount), but some banks -like Sony- will give a huge discount on the upfront fee just for attending an hour online seminar with a financial planner (and you can decline the planner’s insurance offer and still get the discount).

    In my case, I did the full application with both MUFG and Sony. MUFG gave me a better interest rate, but after crunching the numbers of the insurance and upfront fees, Sony was cheaper and I went with them.

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