Japan banks’ mortgage and deposit rates Report Interpretation
Goldman Sachs finds that Rakuten Bank and Docomo SMTB Net Bank increased floating mortgage rates in August, narrowing online banks’ historical price advantage. Fixed mortgage rates also rose broadly alongside higher long-term JGB yields, while banks intensified efforts to attract retail time deposits.
Summary
Goldman Sachs finds that Rakuten Bank and Docomo SMTB Net Bank increased floating mortgage rates in August, narrowing online banks’ historical price advantage. Fixed mortgage rates also rose broadly alongside higher long-term JGB yields, while banks intensified efforts to attract retail time deposits.
- Docomo SMTB Net Bank raised its new-loan floating mortgage rate by 25 bp, bringing it roughly in line with the tracked-bank average of about 1.16%.
- Rakuten Bank raised its floating rate by 4 bp after an increase in the prior month.
- Most banks increased fixed mortgage rates as long-term JGB yields rose about 14 bp from end-June to end-July.
- The report argues that major banks including MUFG, Resona and Bank of Yokohama now offer the lowest discounted floating rates among banks tracked.
- Banks are raising ordinary and time-deposit rates and using promotional campaigns as they seek retail time deposits to manage deposit funding costs.
Report Interpretation
Overview
This August update tracks Japanese banks’ mortgage and deposit pricing. Goldman Sachs highlights a narrowing online-bank mortgage-rate advantage, broad increases in fixed mortgage rates, and a shift toward retail time-deposit acquisition as banks manage higher funding costs.
Core views
Goldman Sachs reports that Rakuten Bank and Docomo SMTB Net Bank raised floating mortgage rates on new loans in August. Docomo SMTB Net Bank’s 25 bp increase was relatively large and brought its rate roughly in line with the average floating rate of the banks tracked, at around 1.16%. Rakuten Bank raised its floating rate by 4 bp, following an increase in the previous month. The report therefore sees a notable change from the historical pattern in which online banks generally underpriced traditional banks in mortgages. Most banks also raised fixed mortgage rates. Goldman Sachs links this to the increase in long-term Japanese government bond yields, which rose by around 14 bp between end-June and end-July. The report presents August and July mortgage-rate comparisons across floating loans and fixed-rate loans, including 3-year and 10-year fixed products, to show the month-on-month pricing changes. The report says some regional banks are already observing a changing mortgage competitive environment as online banks lift floating rates. Online banks historically had an advantage from low-cost operating models without physical branches. Goldman Sachs argues that this is giving way to higher mortgage pricing because funding costs are rising and demand for non-mortgage loans is robust. It also identifies a strategic shift: online banks appear to be relying more on channels other than mortgages to acquire accounts and strengthen their ecosystems. Accordingly, the lowest discounted floating mortgage rates among tracked banks are now offered by major institutions such as MUFG, Resona and Bank of Yokohama rather than by online banks. On deposits, Goldman Sachs notes that a notable number of banks raised August ordinary and time-deposit rates after the Bank of Japan’s June policy-rate hike, while many continued time-deposit promotional campaigns. Comments at some banks’ first-quarter earnings announcements indicated a strategic preference for growing time deposits rather than ordinary deposits. Corporate deposits grew alongside solid corporate lending in the first quarter, but their market-linked nature makes deposit funding costs harder to reduce. The report says some banks are therefore seeking retail time deposits to lower their overall deposit betas, indicating that competition for deposits is also changing.
Analysis framework
The report compares August and July mortgage and deposit-rate disclosures across tracked banks, then links pricing changes to long-term JGB yields, funding costs, loan-demand conditions and banks’ deposit-acquisition strategies. It uses company data and month-on-month rate changes to assess competitive positioning.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Rakuten BankOnline bank that raised its floating mortgage rate by 4 bp in August.
- Strengths
- Historically offered lower mortgage rates through a relatively low-cost, branch-light structure.
- Weaknesses
- Its floating mortgage pricing advantage is narrowing.
- Comparison
- The report says the lowest discounted floating rates are now offered by MUFG, Resona and Bank of Yokohama rather than online banks.
- Risks
- Rising funding costs and a strategic shift away from mortgages as an account-acquisition channel.
- Docomo SMTB Net BankOnline bank that raised its new-loan floating mortgage rate by 25 bp in August.
- Weaknesses
- Its rate moved roughly in line with the tracked-bank average of around 1.16%, reducing its historical price differentiation.
- Comparison
- The report contrasts its prior online-bank pricing advantage with major banks offering the lowest discounted floating rates.
- Risks
- Rising funding costs and a shift in account-acquisition strategy toward non-mortgage channels.
- MUFGMajor bank identified as offering one of the lowest discounted floating mortgage rates among tracked banks.
- Strengths
- Lowest discounted floating-rate positioning among the tracked institutions.
- Comparison
- Positioned below online banks on discounted floating mortgage rates in the August comparison.
- ResonaMajor bank identified as offering one of the lowest discounted floating mortgage rates among tracked banks.
- Strengths
- Lowest discounted floating-rate positioning among the tracked institutions.
- Comparison
- Positioned below online banks on discounted floating mortgage rates in the August comparison.
- Bank of YokohamaMajor bank identified as offering one of the lowest discounted floating mortgage rates among tracked banks.
- Strengths
- Lowest discounted floating-rate positioning among the tracked institutions.
- Comparison
- Positioned below online banks on discounted floating mortgage rates in the August comparison.
Key data
- Docomo SMTB Net Bank floating mortgage-rate change+25 bpIncrease on new loans in August; described as relatively large.
- Tracked-bank average floating mortgage rateAround 1.16%Docomo SMTB Net Bank’s increase brought its rate roughly in line with this average.
- Rakuten Bank floating mortgage-rate change+4 bpAugust increase following a rise in the previous month.
- Long-term JGB yield changeAround +14 bpIncrease from end-June to end-July, cited as consistent with broad fixed-mortgage-rate increases.
- Deposit-rate observation dateAugust 3, 2026Date for the August bank deposit-rate and campaign comparison.
Impact & implications
Goldman Sachs indicates that higher online-bank mortgage rates may reduce their former pricing advantage and alter competition in floating-rate lending. Rising funding costs and the pursuit of retail time deposits are becoming important drivers of banks’ mortgage and deposit pricing strategies.
What to watch
- Further changes in online-bank floating mortgage rates and whether their price advantage continues to narrow.
- Long-term JGB yield movements and their effect on fixed mortgage-rate pricing.
- Banks’ use of time-deposit promotions and the shift from ordinary to retail time deposits.
- Whether robust non-mortgage loan demand continues to influence mortgage pricing and account-acquisition strategies.