Mr. Hoang, a communications specialist, has just borrowed 1.4 billion VND from a state-owned bank to buy an apartment worth more than 4 billion VND in Ho Chi Minh City. Among the preferential interest rate options from 6% offered by this bank, he decided to choose the fixed interest rate option of 7.5% for the first 3 years and 9% for the remaining time.
"I consulted my friends who borrowed from banks with old loan interest rates of 12-14% per year, and found that the current interest rate is much more reasonable. Luckily, I have cash at this time and have found a house that I like, so I decided to borrow more from the bank to buy my own house," said Mr. Hoang.
Banks compete to launch home loan packages with interest rates of 5-6% per year
Mr. Hoang is just one of many cases that have access to the current preferential interest rate loan package. Because home loans are one of the policies that banks are promoting to increase credit growth in the context of general difficulties. In the first quarter of the year, many banks simultaneously launched new loan packages for individuals to borrow to buy medium and long-term houses, with interest rates of 5-6% per year, equal to or only 1% higher than 12-month savings deposits.
This interest rate is applied during the first 6-36 months of the long-term loan and is considered by bank representatives to be "the lowest in the past decade".
With the advantage of cheap capital costs, foreign banks currently have the lowest home loan interest rates on the market, usually no more than 6% and fixed for the first 3 years.
Mr. Nguyen Thanh Hai, Director of Ho Chi Minh City area of Shinhan Bank Vietnam, said that from the average of 9-10% per year in the last two quarters of last year, the home loan interest rate in the first quarter of this year has decreased by nearly half, to 5-6%.
This bank fixes the interest rate at 5.5% for the first 6 months of the loan. Or customers can choose the option of fixing the interest rate at 6% per year for a period of 36 months; fixing 7.5% per year for the first 5 years.
At state-owned banks such as Agribank, Vietcombank, VietinBank, BIDV, preferential interest rates for home loans only fluctuate from 5% to 7%, slightly higher than those of foreign banks. Some other private banks such as BVBank, SHB , ACB... also join the race for cheap loans with home loan packages with interest rates from 5-8% per year, however, the preferential interest rate period is often shorter than that of foreign banks.
Preferential interest rate table applied in the initial period of medium and long-term home loans at some banks:
| Bank | Preferential interest rate (%) | Time of application |
| Shinhan Bank | 5.5-6 | First 6-36 months |
| Woori Bank | 5.1-5.7 | First 12-36 months |
| BIDV | 5-5.5 | First 6-12 months |
| Vietcombank | 6.3-7.5 | First 6-36 months |
| Agribank | 6.5 | First 24 months |
| VietinBank | 5.8 | N/A |
| BVBank | 5-7.5 | First 5-12 months |
| ACB | 7.3-8 | First 3-12 months |
* After the preferential period, the bank applies floating interest rates.
Cheap lending rates come as banks are scrambling to find new borrowers to increase credit growth.
According to the State Bank, outstanding credit balances by the end of February decreased by 0.72% compared to the end of last year, showing that capital is still difficult to pump into the economy. The deputy general director of a state-owned bank said that although savings interest rates are constantly testing the bottom, people's money is still flowing into the banking system. This helps banks have abundant liquidity, but it is also a headache when banks "have money but cannot lend it out".
In the current context, the deputy general director of this bank said that, in fact, new lending interest rates have decreased across the board, in all areas from production and business loans to consumer loans. However, in the context of weak demand for segments such as production and business, banks must also restructure their lending portfolios, with additional programs to encourage consumer loans, home purchases and repairs.
In addition, according to Mr. Nguyen Thanh Hai, Director of Shinhan Bank Ho Chi Minh City branch, the real estate sector receives special attention from the Government as it is directly related to the people's social security needs. The Government and competent authorities are looking for solutions to solve problems and overcome difficulties for the input factors of the market, which are projects and project investors. Reducing interest rates to support the output of the market, which are home buyers, also contributes to boosting supply. "This is a golden time for people to borrow money for the purpose of buying a house," said Mr. Hai.
In addition to the policy of attracting medium and long-term personal loans, many banks are also focusing on low-interest loan programs of only 3-5% per year for short-term loans (usually 3 months). This is also a way for bank leaders to help them "run the target" of credit growth in the last months of last year and the first quarter of this year, in the context of very difficult credit disbursement when the borrowing power in the market is weak.
Floating interest rates decrease unevenly
In the context of many new low-interest loan packages being launched, the director of the personal loan division of a bank said there was a shift of customers from one bank to another. Borrowers who were paying high floating interest rates switched to borrowing from the new bank to enjoy preferential interest rates that were 2-4% better per year.
A credit officer at another private bank said that recently, she has processed many applications for customers who have transferred from other units, and her existing borrowers have also moved to other banks. However, the process of processing applications is usually only applied to borrowers with large outstanding loans, good collateral for existing loans, or additional collateral.
In fact, the floating interest rate for existing home loans is also cooling down by about 2-3% compared to before, but is still much higher than the mobilization level. In addition, the floating interest rate of some private banks is much higher than that of the state-owned group.
Currently, the floating interest rate after incentives for old borrowers of the state-owned banking group is around 9-10% per year, while some private banks still hold it high above 12%.
Some private banks maintain a high spread between savings and lending interest rates, according to the head of a securities company's consulting department, to have a source to offset rising credit risk provisioning costs in the context of increasing bad debt in order to optimize profits.
| Bank | Floating interest rate for home loans (%) |
| Shinhan Bank | 8.5 |
| Woori Bank | 8.7 |
| Vietcombank | 9 |
| BVBank | 9.5 |
| VIB | 9-10 |
| TPBank | 12-12.5 |
| HDBank | 12-12.5 |
* Floating interest rate is equal to base interest rate plus margin of 2-4% depending on the bank, as of March 28
In the dispatch dated March 5, the Prime Minister assessed that the current lending interest rate has decreased but is not commensurate with the mobilization interest rate.
Experts say that the high interest rates currently are from previous terms when they mobilized high amounts. Currently and in the future, interest rates are on a low trend. Since the beginning of the year, the State Bank has allocated all credit limits (credit room) to banks with a growth ceiling of 15%, equivalent to about 2 million billion VND injected into the economy (about 100 thousand billion VND more than last year). This is a very large number, so the management agency will have many moves to "encourage" banks to lend more.
Particularly in the field of real estate loans, according to the observation of a leader of a 100% foreign-owned bank, loan demand has not really "warmed up" compared to before, if we exclude the number of customers moving back and forth between banks.
"Borrowing from banks to trade or invest in real estate has become very risky in the current context, causing the motivation of real estate traders to decline. Therefore, the number of customers borrowing for real estate investment purposes has decreased sharply while most current borrowers come from real housing needs. This is a good sign," said a foreign bank leader.
To make interest rates more transparent, earlier this year, Prime Minister Pham Minh Chinh requested that average lending interest rates be made public so that people and businesses can choose banks to borrow from.
The State Bank has also requested credit institutions to be transparent about lending interest rates on their websites. After many moves from the Government and the State Bank, banks have also begun to announce lending interest rates on their websites.
Many banks have publicly announced these interest rates in a transparent and detailed manner such as at ACB, VIB, BIDV....
As at BIDV, this bank announced that the average lending interest rate (for both individuals and businesses) is currently 6.49% per year. The difference between the average lending interest rate and the average capital mobilization interest rate is 3.12% per year.
At ACB, for individual customers, the bank announced the average lending rate for short-term is 8.22% and for medium and long-term is 9.7% per year. The average difference between deposit and lending interest rates is 4.05%.
VIB announced an average medium and long-term personal loan interest rate of 8.6% per year, the average difference between deposit and lending interest rates is 3.16%...
However, the way interest rates are disclosed among banks is still not consistent. Many units only announce preferential lending rates but have not announced average lending rates, base interest rates, and floating lending interest rate margins... Therefore, it is still very difficult for people to monitor and compare actual interest rates among banks.
TB (according to VnExpress)Source
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