Japan's Big Banks Hike Floating Mortgage Rates Amid BOJ Tightening

Japan's two largest banks, MUFG and Sumitomo Mitsui Banking Corporation, will raise their floating mortgage rates in September. The move reflects the Bank of Japan's June decision to increase its policy interest rate to around 1.0%, a level not seen since 1991.

The standard rates for both banks will increase by 0.25 percentage point to 3.375% annually, marking the first floating-rate increase in six months. The actual rates applied to borrowers will be lower due to preferential margins based on repayment capacity.

Borrowers who choose floating rates account for about 80% of all mortgage contracts in Japan. The rate increases directly translate into higher monthly payments, affecting household finances nationwide.