With the Surge in Housing Prices, Joint Loans Are Increasing, but There Are Risks of Collapse Due to Divorce or Job Loss—"Careful Future Planning"

1. The Increasing Assumption of "Dual Income" for Home Acquisition

In recent years, the assumption of borrowing based on the combined income of couples has rapidly become common. According to the latest survey by the Japan Housing Finance Agency (April 2025), the use of pair loans and combined income has reached 39.3%, with the breakdown being 25.9% for pair loans and 13.4% for combined income. The ratio is particularly high among the younger generation in their 20s and 30s. This indicates that more households are reaching for price ranges unattainable with a single income by combining the incomes of two people.JHF

The background to this includes the "weight of the price" of housing itself. The Ministry of Land, Infrastructure, Transport and Tourism's Real Estate Price Index (Housing), which uses 2010 as 100, shows that the national housing composite index in January 2025 is 141.3. Particularly, the index for sectional apartments is 210.7, which is outstanding. As a trend in recent years, the index for apartments remains at a high level, and the market for detached houses and residential land is also solid. It continues to be a market difficult to catch up with just the borrowing capacity of a single income.Ministry of Land, Infrastructure, Transport and Tourism

2. The Interest Rate Environment is at a Turning Point—Beware of the "Low Interest Rate Assumption" Stagnation

Since 2024, the Bank of Japan has lifted negative interest rates and also raised policy interest rates. As a result, fixed interest rates are prone to upward pressure along with government bond yields. In the summer of 2025, the rise in fixed interest rates at major banks is noticeable. Although the variable type retail interest rates seem sticky, the risk can increase depending on future outlooks. Borrowing on the assumption that "low interest rates will continue forever" is risky.JHFMogecheck

On the other hand, the behavior of borrowers has also changed. According to the aforementioned agency survey, **44.3% of respondents reported behavioral changes such as "reviewing interest rate types" and "reducing borrowing amounts" after the Bank of Japan's policy changes**. The increase in uncertainty in the outlook is prompting risk-sensitive planning.JHF

3. First Understand—The Differences Between "Pair Loan," "Joint Debt," and "Joint Guarantee"

A pair loan is a method where each spouse borrows under separate contracts. Both parties enroll in their own group credit life insurance, and each can use the housing loan deduction. The disadvantages include having two sets of contracts and fees, even if one party's debt is cleared due to the other's death, the other party's debt remains, and complications in handling during divorce.Great Home Loan SearchMUFG Bank

Joint debt (combined income) involves a single contract where both spouses are debtors together. Flat 35's combined income falls under this category, and it is common for both parties to have shares and deductions. However, group credit life insurance is generally only for the primary debtor, and **"joint life insurance" covering both spouses** varies by product.Flat 35SUUMO

Joint guarantee (combined income) involves one debtor, with the spouse as the guarantor. The major difference is that the spouse cannot obtain shares or housing loan deductions. Attention is needed regarding changes in disposable income and imbalances during inheritance or divorce.Great Home Loan Search

4. Typical Patterns of "Stalling" During Divorce—The Pitfalls of Pair Loans

Divorce directly impacts repayment plans. With pair loans involving two contracts, practical difficulties increase significantly, such as "the party continuing to live in the house effectively bearing the other's loan," "failure to consolidate names," "strict re-evaluation for name changes," and "issues involving shares, remaining debt, and gift taxation." Consolidating names to one party requires the financial institution's consent for refinancing, collateral substitution, and guarantor substitution.National Voluntary Sale AssociationVery Best Law Offices Nagano Office

Options broadly include (1) selling and settling, (2) one party continues living with refinancing and name consolidation, (3) both parties continue repayment (high risk), and (4) considering voluntary sale. From a systemic perspective, it is essential to connect with public consultation services such as Law Terrace and prepare an agreement considering property division, shares, and housing loan clauses.Houterasu+2Houterasu+2

5. How to Prepare for Job Loss, Illness, or Parental Leave—Group Credit Life Insurance, Disability, and Unemployment Compensation

Group Credit Life Insurance (GCLI) is insurance that clears the remaining debt in cases of death or severe disability (depending on the product, three major diseases or eight major diseases, etc.). However, it is important to note that **"unemployment" is generally not covered. Recently, products that can add unemployment compensation riders or disability compensation have become available, but there are detailed conditions regarding exemption periods, payment limits, and covered events. **How to cover "inability to work"** is crucial for a household with a dual income repayment assumption.Resona BankAEON BankRakuten Bank

Additionally, the idea of protecting the entire household by setting the benefit amount to match the monthly repayment amount with independent disability insurance or income protection insurance outside of the GCLI is effective. As an option not attached to the housing loan, it offers flexibility to join or review during repayment.Lify

6. Basics of Housing Loan Deductions and Taxation—Alignment of Shares, Borrowing, and Residence

The Special Deduction for Housing Loans is based on a house used for one's own residence and one's own borrowing. For a couple to receive the deduction, it is key that each borrows (incurs debt), each holds shares, and resides in the property. A guarantor alone is not eligible for the deduction. A significant discrepancy between shares and actual financial contributions can lead to issues of gift taxation, so it is advisable to confirm tax rules before contracting.MogecheckLIFULL HOME'S Business Brokerage & Management

7. "Being Able to Buy" and "Being Able to Repay Fully" Are Different—Repayment Ratio and Buffer Funds

The "winning strategy" for long-term repayment is to keep the repayment ratio (annual repayment amount/household annual income) around 20%, secure emergency funds (6-12 months), and avoid relying on bonuses for repayment. According to the agency survey, the proportion of repayment periods exceeding 35 years is expanding, and the most common repayment ratio is in the 15-20% range. Even at this level, temporary income reductions due to parental leave, reduced working hours, caregiving, or job changes can easily encroach. Creating a household structure with low fixed costs ultimately becomes a defensive line for homeownership.##HTML