Lack of long-term credit, young people are afraid to borrow to buy a house

In big cities, young people need 20-25 years of income to buy a 70m² apartment worth 3-4 billion VND. Therefore, they really need preferential credit packages for 20-30 years, with low interest rates of 5-6%/year to reduce debt repayment pressure and have the opportunity to own a house.

Preferential credit for affordable housing for young people

At the workshop “Effective financial leverage – Housing opportunities for young people” on June 26, Ms. Ha Thu Giang, Director of the Department of Credit for Economic Sectors (SBV) said that there are currently 9 banks participating in the 145,000 billion VND credit package to support social housing, with interest rates 1.5-2% lower than the market rate per year, currently at 5.9% and continuing to decrease.

In particular, the loan package for people under 35 years old to buy social housing is offered with an interest rate 2% lower than the average of the 4 "big" banks in the first 5 years, and 1% lower in the next 10 years.

Agribank representative said that the bank has launched a credit package of 10,000 billion VND until 2030 for young people to buy houses, with a preferential interest rate of 6.1%/year, a term of up to 15 years, lending 100% of capital needs, and flexible collateral. To date, more than 300 customers and 7 investors have received loans, with a total disbursement of nearly 1,300 billion VND.

In addition, from April 2025, Agribank will continue to implement a VND10,000 billion package for civil servants, public employees and workers under 35 years old to buy commercial houses. This loan package has an interest rate of 5.5%/year fixed for the first 3 years, a maximum loan term of 40 years, a principal grace period of up to 60 months and is applicable even if only one person in the couple meets the age requirement.

However, according to Mr. Ha Quang Hung, Deputy Director of the Department of Housing and Real Estate Market Management ( Ministry of Construction ), the current loan term is still not long enough compared to the demand. Young people need a loan of 20-30 years and a low interest rate of 5-6%/year to reduce the pressure of debt repayment.

In reality, people’s incomes cannot keep up with the increase in housing prices. In large cities, to buy a 70m² apartment costing 3-4 billion VND, young people need to save up for 20-25 years. Most couples earning 20-30 million VND/month still have to rent a house or live with family without financial support.

Expert Vu Dinh Anh warned that many young people have had to take out hot loans or black credit to pay their rent on time. Therefore, when borrowing money, it is necessary to carefully read the terms of the contract regarding the extension period, handling of late payments or financial incidents to avoid falling into an uncontrolled debt spiral.

Young people really need preferential credit packages with terms of 20-30 years and low interest rates of 5-6%/year to reduce debt repayment pressure and have the opportunity to own a house.

Removing the "bottleneck" of social housing credit

According to experts, the lack of credit for social housing purchases stems from many reasons, notably the scarcity of supply and the lack of stability in support capital. Many preferential loan packages are short-term, lack resource diversity, and are not guaranteed by the State budget in the long term.

An expert commented: "Commercial loan interest rates are still high and loan terms are short, making both investors and home buyers hesitant."

To remove bottlenecks, it is necessary to review and perfect the legal system related to housing and real estate credit to ensure consistency, uniformity and ease of implementation.

Experts have proposed amending the personal income tax policy to support first-time homebuyers: increasing the family deduction level, allowing partial deduction of home loan interest from taxable income. This is an indirect solution to help reduce monthly financial pressure.

In addition, it is necessary to improve access to credit through long-term loan packages with preferential interest rates. The central budget needs to provide sufficient and timely capital to the Social Policy Bank to implement the program of lending for purchasing and leasing social housing.

At the same time, it is necessary to speed up the disbursement of the VND120,000 billion credit package (currently increased to VND145,000 billion), expand the loan target to individuals and households, especially those under 35 years old. According to Mr. Ha Quang Hung, Deputy Director of the Department of Housing and Real Estate Market Management, the loan term should be extended to 15-20 years, and preferential loan packages should be designed specifically for young people buying commercial houses for the first time.

The State Bank of Vietnam (SBV) representative, Ms. Ha Thu Giang, said that they are currently coordinating with localities to clearly identify groups of projects with prices suitable to people's incomes to support more effective disbursement. "If all parties join hands, social housing credit will truly become a lever for low-income people to settle down," she emphasized.

Source: https://baodaknong.vn/thieu-tin-dung-dai-han-nguoi-tre-ngan-ngai-vay-mua-nha-257127.html