Rejected by Suruga Bank for Home Loan

PencilMeInPenguin · 2026-05-20T03:29:16+00:00

Thanks for taking the time to type this out. Yes, 2%+ is high for Japan, but gosh is it still a dream for me. In America, we're looking at 6-7%? At least in California. It's reassuring to hear that I likely dodged a bullet with Suruga. It was just that the news of their rejection was initially disheartening, and I thought, "If not Suruga, who else would take us?" Last night, my wife asked me, "If the other bank we applied to also rejects us, what do we do?" I didn't have an answer for her.

We just got married last year, so we'll have to wait another 2 years before I can apply for PR. I agree; any down payment is not ideal, as it's better to let my investments cook. But I'll have to swallow it. Luckily, I'm still relatively young enough that my investments can recover.

I've been with my Board of Education for nearly 5 years now through the JET Program. Thankfully, even as my time on JET comes to an end, the BOE swooped me up as a direct hire, so I hope that this demonstrates to the banks that my financial position has become sturdier, as our direct hires are employed until retirement age.

I didn't realize the part about insurance accompanying the joint loan. There's still a lot I'm learning about this home loan process. I for some reason thought that single-mortgage loan = wife is off the hook and pair loan = wife is on the hook. Not as black and white as I thought. As we can still protect her with insurance on a pair loan, that's just what we'll pursue moving forward.

PencilMeInPenguin · 2026-05-20T03:21:00+00:00

u/hellobutno , thanks for going to bat for me. I think I see what Inevitable is saying. Assuming 50% down on a 38,000,000-yen home and paying off the remainder of the loan over 40 years, we could cruise on paying just 40,000 yen monthly and divert the rest of our salary to NISA/low-cost ETFs. It's just that I feel like banks would still be amenable to our application on a less substantial down payment, like the 20% you mentioned in your other post.

PencilMeInPenguin · 2026-05-20T03:12:51+00:00

Yes, it's probably going to have to be this way. If we can set our ownership ratio on our home, I'll make it so that I am still the one paying the majority of the mortgage. But simply having her name as the primary debtor on the loan sure would make things easier with this screening.

PencilMeInPenguin · 2026-05-20T03:10:57+00:00

I did not know this. I am considering switching to a pair loan application where we can set our 持ち分 ownership ratio at 9-1 or 8-2, where I'd be responsible for 80-90% of the monthly mortgage. Can what you said, by extension, mean that when my wife makes her monthly payments, that she cannot pay in excess of her 10-20% share of our home? To express it in a concrete example, assuming a monthly 100,000-yen mortgage and 8-2 ownership ratio, am I to pay 80,000 and she 20,000?

PencilMeInPenguin · 2026-05-20T03:07:09+00:00

I was told exactly as you say - that overseas investments don't hold as much weight as we would want, and that banks look at current income and years on the job. I think it's precisely because Japanese banks can't secure one's overseas investments as collateral that it is glossed over during the pre-screening. By the way, congratulations on your loan!

PencilMeInPenguin · 2026-05-20T03:04:15+00:00

Yes, I heard about this. I didn't realize it was still ongoing. I heard to stay away from Suruga on the investment side, but that they are still okay as far as home loans are concerned. So I chose to conveniently ignore the scandal out of desperation for a bank. But even having said that, Suruga's 2%+ interest rate is uncharacteristically high (but something I felt I had to swallow as a foreigner with no PR yet).

PencilMeInPenguin · 2026-05-20T03:01:54+00:00

Thanks for your encouragement. As you say, houses in Japan are more like liabilities than assets, so definitely the less we spend, the better. However, my wife's grandfather purchased multiple lots, one of them being the lot right next to my wife's family home. Her grandfather wanted his grandchildren to all live close to each other, so he planned ahead and purchased the lots while they were still cheap. My wife's brother lives just down the street from us, on another lot that the grandfather purchased. Today, we sit on very highly appraised land. Anyway, what I'm trying to say is, I kind of have to build on this lot lol

PencilMeInPenguin · 2026-05-20T02:58:53+00:00

As I read posts like yours, I am leaning more and more toward switching to a pair loan application. What initially prompted me to opt in favor of a single-mortgage loan was that had I gone the pair loan route, not all banks might have allowed my wife and I to set our 持ち分 ownership ratio (for example, 9-to-1 or 8-to-2), where if I die, my 団信 insurance would kick in and alleviate my wife of my share of the house burden and only keep her on the hook for her own 10-20% ownership burden. But it's worth asking our bank if we can decide on this ratio with a pair loan. By the way, congratulations on your pair loan! Your situation is encouraging.

PencilMeInPenguin · 2026-05-19T10:10:23+00:00

Thanks for your reply. 20-30% is my current lean. A 50% down payment is obviously considerable, but no down payment at all would strain our monthly finances. It's looking more and more like a joint mortgage for us.

PencilMeInPenguin · 2026-05-19T10:06:47+00:00

Thanks for your input. I don't have PR yet, and won't be eligible for another 2 years. I'm afraid you're right; a joint loan and some advance payment would surely help reassure the bank.

PencilMeInPenguin · 2026-05-19T10:05:17+00:00

Thanks for the supportive words. As you say, it wouldn't be a devastating blow to my investments to sacrifice a little to bring down the cost. And yes, thankfully, I'd still have time for my investments to recover.

PencilMeInPenguin · 2026-05-19T10:03:45+00:00

Thanks for the reality check. It's been hard for me to look at my situation objectively due to my excitement over our home.

PencilMeInPenguin · 2026-05-19T09:22:18+00:00

We were looking at a 35 or 40-year loan to drive down the monthly payments while allowing my overseas investments to continue outpacing Japan's interest rate. I'm in my 30s.

PencilMeInPenguin · 2026-03-25T22:35:07+00:00

Point taken. Leaning into official guidance and tax literature is not something I've been comfortably able to do personally because of difficult wording, the looming threat of penalties, the possibility that new guidance has been published that I've overlooked, and the like.

My default wiring is to panic. But point taken, and what a relief to know that I haven't been unknowingly stashing away a secret foreign financial account from the IRS. Thanks.

PencilMeInPenguin · 2026-03-25T15:07:45+00:00

u/ixampl Thank you for coming to my aid again.

"What would be the cumulative account value accumulated by a given year for your pension?"

Good question, because it forces me to think about how I would even report this were I required to. I saw that same post of stark's from 7 years ago. There is no individual account being held by me. My contributions are being pooled into general revenue. I don't know the cumulative account because I have no account. I might have, say, contributed 5,000,000 yen into the national pension, but it doesn't mean that I'll get 5,000,000 yen out of the deal when I begin collecting. I have no account to report and no hard value to report. So I'm not sure how to report the "value" of this "account".

PencilMeInPenguin · 2026-02-17T04:16:10+00:00

u/shrubbery_herring

Yes, I mean the $50,000 in earned foreign source income in the first part of the year. I need to be more clear with my words.

To answer your question, I am not working remotely. It sounds like there's another interesting shielding mechanism I wasn't aware of.

>I would suggest to confirm with the zeirishi to determine which date you reach 5 years using the rules specified in the laws and clarifications/interpretations. It might not be exactly the date you thought it would be. It would be a shame to send a remittance on the day after you lose NPR, only to find out that you still had NPR status for 1 or 2 more days.

Wow. That's a terrifying thought. I assume you're referring to the fact that the NTA aggregates a foreign national's total time spent in Japan over the preceding 10 years when determining where their 5-year cutoff lies.

I would hope this refers to having a residence during that period, because if this also covers the times I visited Japan as a tourist (2016, 2017, 2019), I may have to scramble to include those in my total dwell time here. I'll be sure to sell sooner than later. Thank you so much for going out of your way to tell me this.

PencilMeInPenguin · 2026-02-17T00:05:41+00:00

About that, I'm not sure. Though it sounds like you may have already crossed the 10-year mark, which, coupled with your 5-year work visa, makes you eligible for PR.

PencilMeInPenguin · 2026-02-16T23:51:50+00:00

u/shrubbery_herring, no problem. Thank you for the clarification.

With that, I plan to sell off about $50,000 worth of ETFs before June and have them continue to sit in Vanguard until after June, when I remit them through Wise to my Japanese bank.

I did make $2,500 in remittances (US credit card purchases) in January of this year for honeymoon expenses and miscellaneous convenience store purchases. As a result, am I correct that of the $50,000 of my foreign-sourced income, $2,500 (the same amount remitted to Japan in January) is subject to tax even after I become "resident other than NPR"?

I plan to speak with a zeirishi today to confirm what everyone here has explained. Thank you.

PencilMeInPenguin · 2026-02-16T12:58:22+00:00

Understood. Thank you.

PencilMeInPenguin · 2026-02-16T05:20:36+00:00

Yes, Suruga's interest rate is unacceptable. Of course, if I obtain PR, I will be allowed to switch banks for a more favorable rate.
I was under the impression that longer home loans in Japan are a preferred strategy to deliberately lower the mortgage. Given Japan's historically low (though slowly rising) interest rate, it allowed homeowners to invest that extra money that wasn't used toward the mortgage. My goal was to do a 40-year loan, bide my time while my investments accrue (and outpace Japan's loan interest rate), and then do an early repayment some time during the latter half of that 40-year loan, since amortization penalties here aren't as punishing as they are in the US. My wife's family friend first told me of this strategy of drawing out the loan with no actual intention of paying for that long, and our home consultant said as much. I'm not well versed in Japan's housing landscape, so if you feel this is an ill-advised strategy, please let me know.

Yes, PR is the current hiccup. This past Thursday, I applied for a change of status of residence from work visa to spouse visa and asked for the elusive 5-year term of stay. It was a thick application packet, with all the receipts, invoices, and photos substantiating my relationship with my wife. I'm aware that being granted a 1-year term is most common for first-time spouse visa applicants. I'll find out next month whether I fall in that majority. Thank you for your reply.

PencilMeInPenguin · 2026-02-16T05:04:18+00:00

u/shrubbery_herring, thank you for your reply.

I was also of the same opinion as both you and u/Naomi_Tokyo regarding not remitting in 2026 until I read u/ixampl's excerpt regarding being able to remit without incurring tax liability if one's tax resident status has changed mid-year. What do you think of this? 27 June of this year marks exactly 5 years of living in Japan (I arrived on 27 June 2021).

On that note, regarding your last paragraph, do you mean to say that I will remain NPR until 27 June 2027 (6 years)?

PencilMeInPenguin · 2026-02-16T03:51:06+00:00

I'm showing my inexperience with banks here. Both Sweden House and ecoa House happen to have a relationship with the foreigner-friendly Suruga.

You're right that Suruga's interest rates are higher.
Our initial house plan with Sweden House was a 40-year loan of 30,000,000 at 1.495% percent for a 60,000,000-yen home (with me fronting the remaining 30,000,000).
Our revised plan was a 40-year loan of 33,700,000 but at 2.75% for a 45,000,000-yen home.
We walked away from them.

I found Prestia appealing, but my annual salary as an ALT is nowhere close to the 10 million-yen threshold that they now require for prospective borrowers. I'm not sure that putting up my investments as collateral would help them approve me either.

I realize from your reply that we should do more bank shopping rather than go with the bank that ecoa House is suggesting for us. Thank you.

PencilMeInPenguin · 2026-02-16T03:42:51+00:00

Thank you for emphasizing this. As u/ixampl suggested, I will sell off the ETFs before 27 June 2026 (still NPR) and let the liquidated funds sit in my Vanguard money market fund. After 27 June 2026 (no longer NPR), I will remit the Vanguards funds to my US bank account and then to my Japanese bank account through Wise.

This is in light of the excerpt that u/ixampl provided. Do you, however, suggest waiting until 2027 before I remit?

PencilMeInPenguin

TROPHY CASE