General Discussion

Japan introduced 100-year, multi-generational mortgages during the real estate bubble of the late 1980s and early 1990s as a way to make high-priced homes appear more "affordable". These products, however, largely failed to increase general home affordability and are not common today.

Historical Context and Function

Purpose: The extended loan terms were a response to sky-high property prices, designed to lower monthly payments by stretching repayment across three or four generations.
Mechanism: Heirs could inherit both the property and the remaining debt, effectively binding succeeding generations to the mortgage payments when the original borrower passed away.

Outcome: These long-term mortgages did not achieve widespread success in promoting general home ownership. Instead, they were more likely to be used by affluent homeowners as an estate-planning tool to reduce inheritance taxes. The practice was associated with the excessively loose credit standards that contributed to Japan's financial crisis in the 1990s.