Agencies
Mortgage loans specifically designed for couples are on the rise, amid soaring prices for newly built condominiums in the Tokyo metropolitan area and an increase in dual-income households, a recent study has found.
"Pair loans,” two separate loans to cover the cost of purchasing a property, have proven particularly popular among younger couples as they can borrow larger amounts than if they applied individually.
Married couples with pair loans accounted for 33.9 percent of contracts for new condominiums in and around the capital in 2023, the highest proportion since the study began in 2018, while individual mortgage holders accounted for 65.0 percent, according to staffing service group Recruit Holdings Co.
The average purchase price for a condominium in the Tokyo metropolitan area stood at a record-high 60.33 million yen, up by 1.43 million yen from 2022, while the average amount of money borrowed was 52.35 million yen, up 2.72 million yen.
The trend has also been observed in the Tokai and Kansai regions in central and western Japan, respectively.
Pair loans were chosen by people in their 20s and 30s more frequently than other generations, at 16.5 percent and 18.6 percent, respectively, compared with an average of 10.8 percent for all borrowers, according to a study conducted in January 2024 by a research institute under Sumitomo Mitsui Trust Bank.
"There are more people who want to own properties equally with their partners, as more women work as full-time employees,” said Sakura Takeshita, a financial planner.
But in the case of a pair loan, a couple may struggle if the income of one of them is drastically reduced due to unforeseen circumstances. Housing loans in Japan typically have a maximum repayment period of 35 years.
In the event of a breakup, a pair loan can complicate matters as one of the parties may wish to continue living in the property rather than selling it to repay the mortgage.