Pair Loans in Japan: Double Your Mortgage Power

Note: This content is specific to the Japanese mortgage market.

In Japan, real estate prices in cities like Tokyo are high. To afford a family home, many couples combine their incomes. While "Joint Tenancy" exists, the most popular financial product for dual-income households is the Pair Loan.

What is a Pair Loan?

Instead of one big loan with two names, you take out two completely separate loans for the same house.

• Husband: Borrows ¥40 Million (Loan A).
• Wife: Borrows ¥40 Million (Loan B).
• Each person is the guarantor for the other's loan.

The Secret Benefit: Double Tax Deduction

Japan offers a Housing Loan Tax Deduction: 0.7% of your outstanding loan balance is deducted directly from your income tax for 13 years.

• Single Loan: Deductions are capped per person. If the loan is huge, one person hits the cap and wastes potential tax savings.
• Pair Loan: Since there are two legal loans, both partners claim the full tax deduction separately. This can save a high-income couple millions of yen over a decade.

The Risks

1. Divorce: Unwinding a Pair Loan is a legal nightmare. You have to sell the house or refinance the entire amount under one name (if eligible).
2. Maternity Leave: If one partner stops working, they stop paying income tax. Since the tax deduction is a credit against tax paid, you lose the benefit during the years you have no income.
3. Fees: You pay double the administrative fees (stamp duty, judicial scrivener fees) because you are registering two contracts.

Conclusion

The Pair Loan is an aggressive fiscal strategy for stable, high-earning couples in Japan. It maximizes tax returns but binds your financial fates together tightly.

👉 Japanese Mortgage Calculator: Pair Loan Simulation