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Japanese chat app operator Line is leveraging its huge popularity among young Asians to expand into financial services across the region.   © Getty Images
Economy

Japan's online banks gain ground on their conventional counterparts

Unshackled by huge costs, digital lenders woo customers with better rates and new services

MITSURU OBE, Nikkei staff writer | South Korea

TOKYO -- The most popular mortgage lender in Japan is not one of its big established banks, but an online-only company known as SBI Sumishin Net Bank.

The reason: low mortgage rates. SBI Sumishin can afford to lend at very low rates -- a 10-year fixed-rate home loan carries an interest rate of 1.17%, compared with the average rate of 1.28% for major banks -- because it has a lean cost structure and no branch network. SBI Sumishin also offers other benefits, such as free mortgage insurance and refinancing.

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