Home loan approvals remain difficult.

Commercial banks are continuously launching real estate loan programs with unprecedentedly low interest rates, but those in need of loans are still hesitant, fearing that interest rates will rise sharply after the preferential period. Meanwhile, the real estate market has not truly recovered, supply is scarce, and prices remain sky-high, making them inaccessible to many.

Competing for preferential home loan offers

Speaking with reporters from the Nguoi Lao Dong newspaper, people working in the banking and real estate sectors all said that never before have banks launched so many home loan programs with extremely low interest rates as they are now. For example, major banks like Vietcombank and BIDV are offering home loan packages with interest rates of only 5%-5.5% per year for the first 12 months and 6%-7% per year for the following 2-3 years.

Private commercial banks such asACB , Eximbank, VIB, etc., offer slightly higher preferential interest rates, but generally do not exceed 8% per year in the first few years. To attract customers, each bank also offers many other preferential policies such as grace periods (principal repayment waivers) of up to 5 years, early repayment without penalty interest, etc.

Although lending interest rates in general, and home loans in particular, are considered to have hit rock bottom recently, actual credit growth has not met expectations. According to the latest statistics from the State Bank of Vietnam, in the first four months of 2024, credit growth in the system only reached about 1.5%, an improvement compared to the first two months of the year, but still lower than the same period last year. Many people who need to borrow to buy a house say that interest rates are "very attractive" but are not yet ready to borrow to buy a house for living, renting, or investment for various reasons.

Mr. Tran Minh Tam (residing in Go Vap District, Ho Chi Minh City) said that his biggest concern right now is how banks will calculate interest rates after the preferential period ends. "The banks say that after the preferential period ends, they will use the base interest rate plus a margin of 2.5% - 3.5% or apply a floating interest rate, which is unclear. I don't know what a base or floating interest rate is to calculate my repayment ability. Not to mention, if I repay early, I will have to pay a penalty fee of 1% - 4%, which makes me very hesitant," Mr. Tam said.

Meanwhile, according to our research, many banks are applying floating interest rates of 9% - 10% per year, much higher than the preferential interest rates offered initially. With these interest rates, those who need to borrow to buy a house or land must consider their options very carefully.

Low mortgage interest rates are still a concern for many people, who are hesitant to buy a home for living, investment, or rental purposes... Photo: LAM GIANG

The market remains tough, and investors are worried about being burdened with debt.

Ms. Hoai Thu (residing in Binh Thanh District, Ho Chi Minh City) said she has about 4-5 billion VND in finances and wants to buy an apartment or townhouse for investment but hasn't dared to "put down the money" yet. "Many credit officers advised me to borrow an additional 1.5-2 billion VND to buy high-end properties that sellers are 'cutting losses' on, waiting for the market to recover so I can sell them for a profit."

"But I realize that with the real estate market in Ho Chi Minh City still not booming, buying for short-term investment is very difficult right now. If the preferential interest rate period ends before I can sell the house, I'll have to bear a huge debt and interest," Ms. Thu analyzed.

In fact, it has been observed that many investors are still holding onto real estate and struggling to pay tens of percent in bank interest for the past two years since the market froze.

Some people even borrowed money to buy 2-3 plots of land or apartments; pooled money with friends to buy real estate in the provinces, amounting to tens of billions of dong... when the market was booming, now that prices have plummeted, they can't cut their losses and are left with debt and paying billions of dong in interest every year.

Regarding floating interest rates, a senior leader of Vietnam Industrial and Commercial Bank (VietinBank) stated that many banks have long based their base interest rates on the average interest rate of 12-month term deposits of the four major banks (Vietcombank, Agribank , VietinBank, BIDV).

Homebuyers can monitor savings interest rate trends at major banks to determine the base interest rate, and then calculate the loan interest rate. From there, they can calculate the monthly repayment amount after the fixed interest rate period ends.

To avoid financial ruin when borrowing to buy real estate, a Vietcombank branch manager recommends that, in addition to interest rates and related loan fees, borrowers carefully consider other factors such as the stability of their income, and the percentage of their income that will be spent on family living expenses (children's tuition, educational needs, health and fitness, and contingency funds for unforeseen expenses). "From there, borrowers can choose a loan interest rate and fixed interest rate period that suits their financial capabilities," said a Vietcombank branch manager.

Making early payments is proving difficult.

Recently, the Nguoi Lao Dong newspaper received several complaints from homebuyers about unexpectedly receiving notices of interest rate increases on their loans without clear justification for the calculation.

Some customers who previously took out mortgages are still paying interest rates of 12%-13% per year, even though lending interest rates have dropped sharply over the past six months. Furthermore, some people have reported difficulties when settling their mortgage loans early; they also face obstacles when trying to repay loans early through other banks, and are not allowed to settle their loans completely.

Source: https://nld.com.vn/cho-vay-mua-nha-van-kho-196240501211147259.htm