Home loan interest rates are about to drop sharply.

Interest rates on new home loans have decreased at some banks.

Although deposit interest rates have been repeatedly lowered by the entire banking system, the 12-month interest rate has now fallen below 7% per year. Not many institutions are still offering rates above 8% per year.

However, due to a time lag, mortgage interest rates have not yet shown a clear downward trend. This August, only a few pioneering lenders have significantly reduced interest rates.

Recently, Vietnam Public Commercial Bank (PVCombank) has been listed among banks offering the highest interest rates on home loans, reaching up to 12% per year. This is the rate during the preferential period. After that, the figure can rise to over 15% per year.

Home loan interest rates have dropped sharply (Figure 1). — Although not yet a widespread trend, interest rates on home loans at some banks have begun to drop significantly. (Illustrative image)

From August onwards, the preferential interest rate for home loans at PVCombank has been adjusted down to just 9% per year, a significant reduction of up to 3%. Some applicable conditions, such as the maximum loan-to-value ratio and maximum term, remain unchanged at 85% and 20 years, respectively.

Hong Leong Bank is also one of the few banks that have aggressively reduced interest rates on home loans. Since August, the interest rate on home loans at this foreign bank has dropped to just 8.5% per year, a decrease of 9.5% per year compared to recent times.

However, not many customers will be able to access this credit because this policy only applies to collateral in Ho Chi Minh City (excluding Can Gio, Hoc Mon, and Cu Chi), central Hanoi, and Binh Duong (Thu Dau Mot, Thuan An, and Di An).

For several months, Tien Phong Commercial Joint Stock Bank ( TPBank ) has been among the top banks offering the lowest interest rates on home loans. However, in August, TPBank also significantly reduced its interest rate from 7.8%/year to just 6.8%/year, a decrease of 1%/year.

TPBank offers loans with a maximum term of up to 30 years and a loan limit of up to 90% of the total asset value.

Many places offer interest rates above 10% per year.

Although some pioneering lenders have significantly reduced mortgage interest rates with substantial discounts, many lenders still charge interest rates above 10% per year.

For a long time, HSBC Bank had the highest interest rate for home loans, reaching 11.5% per year. As of August 2023, this high rate had not changed significantly.

Global Petroleum Bank (GPBank) also maintains a high interest rate of 11.3% per year for home loans. Following closely behind are 11.2% per year at An Binh Commercial Joint Stock Bank (ABBank), 11% per year at Asia Commercial Bank (ACB), 10.8% per year at Saigon Hanoi Commercial Joint Stock Bank (SHB ), 10.5% per year at Ban Viet Commercial Joint Stock Bank (BVBank),…

However, these are just reference figures because the interest rate will vary greatly depending on each contract and each customer's credit score.

Strictly control real estate credit risks.

Although banks are still aggressively injecting capital into real estate, real estate credit remains tightly controlled.

Speaking at the conference on the situation and resolving difficulties in the real estate market held on the afternoon of August 3rd, Deputy Governor of the State Bank of Vietnam, Dao Minh Tu, stated that in recent times, the State Bank has proactively and promptly adjusted policies, issued and implemented comprehensive and optimal tools and solutions to facilitate access to credit for people and businesses, contributing to resolving difficulties and promoting the safe, healthy, and sustainable development of the real estate market.

Deputy Governor Dao Minh Tu did not announce the specific reduction in interest rates for home loans, but provided a general overview. To date, the average interest rate reduction at commercial banks ranges from 1.5% to 2%, depending on the type of loan. Many banks offer preferential loan terms and incentives.

The State Bank of Vietnam's stance is to closely follow the directives of the State and Government, aiming to support the healthy and sustainable development of the real estate market in a way that serves the majority of the people, especially those with genuine housing needs, while limiting speculation, price manipulation, and profiteering.

The Deputy Governor affirmed that the State Bank of Vietnam continues to closely monitor credit risks in the real estate sector, controlling the concentration of credit on a few large customers/groups of customers, customers related to major shareholders, and related parties of shareholders of credit institutions, etc.

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