Can Foreigners Get a Mortgage for an Akiya in Japan? Why Most Buyers Still Pay in Cash
Published On: July 28, 2026
Can foreigners finance an akiya in Japan? Learn why cash purchases are the norm, when mortgages are possible, and the financing options available to overseas buyers.
Table of Contents
Supervised By: Hiroki Kazato
Real Estate Expert
Buying an akiya (or empty house) is a popular option for overseas buyers and investors. With prices for some housing significantly lower than in the city, you may expect mortgages to be easy to secure.
Unfortunately, this is rarely the case.
While Japan does not restrict foreign ownership of real estate, financing an akiya is more challenging than buying a home or condo. Many overseas buyers end up purchasing these properties with cash due to the limitations of available financing options for foreigners. However, there are ways to finance an akiya, depending on your immigration status, income, and the condition of the house you want to buy.
In this guide, we’ll discuss why cash purchases dominate the market, when you may find financing options available, and what to consider when buying an akiya in Japan.
Can Foreigners Buy Property in Japan?
Good news! Japan has few rules when it comes to foreign ownership of real estate. Unlike in some countries restricting land purchases by outsiders, in Japan, you are free to buy both land and buildings regardless of your citizenship and residency status. Thus, there is little stopping you from obtaining a vacation home, an investment property, a retirement villa, or even a fixer-upper house to renovate and resell.
However, while there are few barriers to buying real estate, financing such a purchase can be challenging. Mortgage companies have to consider their risk and expected ROI when approving you for a loan, which affects your ability to buy an akiya. In the next section, we’ll discuss why financing such a purchase can be difficult.
Why Financing an Akiya Is Tough
There are several reasons why getting a mortgage to buy an empty house may be hard to secure. According to mortgage companies, many akiya are located in rural areas and may have depreciated in value. Such a home may be challenging to sell if you cannot continue making payments.
Furthermore, older buildings depreciate faster than new ones and may be worth considerably less than their purchase price. Some akiya even have land worth more than the buildings on them, as their structures lack value. The fact that many such homes require renovation makes many lenders reluctant to finance them.
Other practical considerations, such as unresolved inheritance or taxation issues, disputes over property boundaries and ownership, and outdated paperwork, can also make it harder for banks to provide financing. Therefore, the combination of these factors makes many lenders unwilling to offer mortgages for vacant homes.
Why Cash Is the Default in Many Akiya Purchases
With few financing options available to foreigners, many cash purchases of akiya are made. There are several reasons for this, including the relative affordability of these properties and the advantage cash offers in negotiations. For one, an akiya purchase with cash is much more likely to be completed quickly. This is especially important when trying to buy such a home from a bank, which has many properties to sell but few buyers. In some cases, cash can even be advantageous when negotiating the closing price, particularly with private sellers. Additionally, many akiya are relatively inexpensive compared to a conventional mortgage.
As such, an overseas buyer looking to purchase a property in Japan for investment or personal use has good reason to consider cash instead of financing options.
Mortgage Options
When Can Foreigners Get a Mortgage?
Despite conventional wisdom, foreigners can sometimes secure a mortgage for a property in Japan. This depends on a number of factors, such as your residency status, employment history, income, and credit history. You may also find financing options available to you when buying a home in a desirable location. Some banks are more willing to provide loans to foreigners, especially when certain criteria are met.
Here are some of the factors which may improve your chances of getting a mortgage:
- Having a residency or permanent visa status
- Having a stable job in Japan
- Having a reasonably high income
- Having a good credit history
- Having a sizeable down payment
- Having language skills or support during the application process
Additionally, the bank will consider the property itself. Mortgages for properties in desirable locations and good condition are much easier to secure than loans for older akiya in rural regions. Note that you may have to make a decent down payment and cover other expenses on your own when borrowing money to buy an akiya. With that in mind, let’s take a look at how overseas residents can finance property purchases.
Can Overseas Residents Get Mortgages in Japan?
If you reside outside Japan and do not earn your income in Japan, getting a mortgage from a local bank is challenging.
Most Japanese mortgage companies are likely to approve you only if you:
- Reside in Japan
- Earn income in Japan
- Pay taxes in Japan
- Have an established banking relationship with them
- Can demonstrate your ability to repay the loan
Other international banks and private lenders may offer financing options for buying real estate in Japan, although these options are often limited to specific types of loans.
In practice, many international buyers prefer to take out mortgages in their local countries when purchasing real estate in Japan, as financing options in Japan are few outside major cities.
Financing Options
If you cannot take out a mortgage in Japan, there are still several ways to obtain funding for buying an akiya. These may include using personal savings, accessing funds from a home equity loan, and taking out personal loans. Here are some financing options to consider:
| Financing Option | Description |
|---|---|
| Personal Savings | One of the most reliable ways to buy an akiya is to purchase it with cash. This is especially true if you buy a property worth only a few million yen. The popularity of such a purchase method in Japan is partly because many akiya are fairly inexpensive. |
| Home Equity Loans | Some buyers take out loans against their home equity to fund large expenses or investments, including the purchase of an akiya. |
| Personal Loans | In some cases, personal loans may be available to finance a portion of the purchase price or renovations. |
| Renovation Loans | If you qualify for a loan program in Japan, you may be able to take advantage of renovation loans offered by private lenders. |
When applying for any of these options, keep in mind that the APR for personal loans is usually much higher than that for mortgages. If your goal is to minimize costs, you should consider renovation loans to finance large-scale improvements.
What Banks Look For When Considering Applications
If you’re considering a mortgage, there are some general pieces of advice to help boost your chances of approval. Most bank loan officers looking to finance a real estate purchase consider similar things, such as:
- Applicant’s residency status
- Employment history
- Income
- Existing debts
- Credit history
- Value of the property being purchased
- Condition of the property
- Loan to value (LTV) ratio
When considering an akiya mortgage application, many banks assess how desirable the property is and its condition. When you buy an akiya, you may expect few or no improvements to the property. This, combined with its overall desirability, is a factor that many mortgage companies consider when reviewing applications.
Tips to Help You Finance an Akiya in Japan
- Here are some tips that may help you when financing an akiya:
- Look for properties that have been properly registered and documented
- Maintain stable employment with a decent income if you’re a resident
- Make a sizable down payment to reduce the risk to the lender
- Work with a real estate agent who understands international transactions
Remember that multiple banks have different requirements and do not rely on a single lender’s response Finally, if you want to buy an akiya in Japan, it’s worth contacting a real estate agent to learn about ways to finance your purchase.
Summary
As you can see, many overseas buyers of akiya tend to pay for the properties with cash. While this is the default due to mortgage availability and general risk, you also have financing options if you meet the right criteria. First-time buyers should consider consulting a mortgage agent or real estate professional to discuss their options. In particular, note that banks are more likely to provide financing to buyers who intend to occupy the property. Furthermore, consider the property you want to buy and its value, as they determine whether you’ll be able to take out a loan. Understanding these factors helps you make a financially responsible decision when purchasing an akiya.
Source
- Ministry of Land, Infrastructure, Transport and Tourism (MLIT)
- Japan Housing Finance Agency (JHF)
- Real Estate Japan
- Real Estate Information Network System (REINS)
- SMBC Trust Bank
- SBI Shinsei Bank
- SMBC Prestia
- Mizuho Financial Group
- Ministry of Internal Affairs and Communications
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