Use Of Ultra-Long-Term Housing Loans - Press Conference By KATAYAMA Satsuki, Japan Minister Of Finance And Minister Of State For Financial Services

I would like to ask about housing loans. Recently, the use of ultra-long-term housing loans extending over 40 or 50 years has been increasing. Against this backdrop, is the Financial Services Agency considering any measures, such as strengthening its reviews or seeking to ascertain the actual situation at financial institutions?

Generally speaking, in the case of ultra-long-term housing loans with floating interest rates, if those rates rise, both the monthly payment amount and the total repayment amount could increase quite substantially, depending on the terms of the contract. It is important for customers taking out housing loans to properly understand such interest rate risk and other risks associated with housing loans. To that end, I believe that financial institutions, as lenders, need to provide customers with sufficient explanations. As for the details, we are currently in the process of formulating the FSA Strategic Priorities. If I were to provide only a partial explanation at this stage, it could lead to misunderstandings, so I will refrain from going into detail. That said, the Financial Services Agency is currently closely monitoring the explanations that financial institutions provide to customers and borrowers, as well as their screening arrangements and related matters. We will continue to monitor these matters.