Home Loan Borrowing Capacity Calculator
＋More features: what if rates rise, and the home price you can afford
Rising-rate scenarios (a risk check for variable rates)
Compares the monthly payment if the rate rises by +0.5% / +1% / +2% from today (if the loan amount is blank, the result calculated above is used).
Guide to the home price you can afford
Estimates it as home price = (loan amount + down payment) ÷ (1 + purchase-cost rate). The loan amount is the same as above, and purchase costs in Japan are typically 5–10%.
Just enter your annual income and you get a guide to how much you could borrow for a home loan in Japan, along with the monthly payment. It follows the repayment-to-income ratio that Japanese lenders use, so it is a good way to set a budget before you start looking at properties.
How to use
- Enter your gross annual income in man-yen (units of 10,000 yen).
- Choose a repayment-to-income ratio (20–25% is the comfortable level for a household budget).
- Enter the assumed rate and the term, and the borrowing capacity appears right away — no button needed.
How it is calculated
- Monthly payment = annual income × repayment-to-income ratio ÷ 12
- Borrowing capacity = monthly payment × {1 − (1 + monthly rate)−number of payments} ÷ monthly rate (the present-value-of-an-annuity formula, i.e. equal-payment repayment worked backwards)
- Example: annual income 5,000,000 yen (500 man-yen), ratio 25%, rate 1.5%, 35 years → about 104,000 yen a month, so about 34,000,000 yen (3,400 man-yen)
- The repayment-to-income ratio is the share of your annual income taken by a year of loan payments. Screening in Japan generally caps it at roughly 30–35%, but on a take-home basis 20–25% is considered the comfortable level.
Sources and assumptions
- This is arithmetic using the standard formula for equal-payment repayment (the present-value-of-an-annuity factor). For the level of the repayment-to-income ratio, the criteria of the Japan Housing Finance Agency (Flat 35) are a useful reference (for example, 35% or less for an annual income of 4,000,000 yen or more) (in Japanese).
Assumptions and notes
- This is an approximate guide. The amount a lender actually approves depends on your years of employment, other borrowing, the property, group credit life insurance and the screening rate (lenders screen at a rate higher than the one you will actually pay).
- “What you can borrow” and “what you can comfortably repay” are different things. Judge it against your whole household budget, including education and retirement costs.
- Variable rates can rise in the future. It is worth also checking the figures with the rate increased by 1–2%.
Frequently asked questions
How many times my annual income can I borrow?
“Seven to eight times annual income” has been the rough guide in recent years, but what really matters is the monthly payment. At 1.5% over 35 years with a 25% ratio, it works out to about 6.8 times annual income. Thinking in terms of the ratio is safer than the multiple.
How should I think about the down payment?
Home price = borrowing capacity + down payment − purchase costs (5–10% of the price). Add the down payment you can prepare to the result here and subtract the purchase costs to get a guide to your home budget.
What about a pair loan or combined income?
You can get a rough figure by entering the combined annual income of both partners. But the risk if one income falls is larger too, so the ideal is a level that one income alone could still repay.