Japanese Online Banks Raise Mortgage Rates Amid Interest Rate Hike

Online banks in Japan have begun to raise their mortgage rates faster than the Bank of Japan's recent increases. PayPay Bank was the first to do so, raising its benchmark rate for floating-rate mortgages from 2.93 percent to 3.28 percent per annum after the BOJ increased its policy rate to about 1 percent in June.

This move by PayPay Bank drew attention because it was a larger increase than the BOJ's 0.25 point hike, at 0.35 percentage points. Other online banks, such as SBI Shinsei Bank, Sony Bank, and Aeon Bank, also outpaced the BOJ with similar increases.

In contrast, Japan's three megabanks increased their rates by only 0.25 point. Industry experts predict that other online banks may follow suit in the coming months to reflect the BOJ's June rate hike.