Low interest rates for home loans to boost credit growth

A customer borrows at a Vietcombank’s branch in Hà Nội. Interest rates for loans to buy real estate or repair houses at many banks are quite low, at about 5-6 per cent per year. VNA/VNS Photo

HÀ NỘI — Real estate credit is expected to increase as interest rates for land and home loans at many banks are staying at the lowest level in many years.

According to a home buyer, interest rates for his home loan are currently low at 6 per cent per year. About two years ago, the rate was about 10 per cent per year, but now the financial pressure on him and his family has been significantly reduced.

Interest rates for loans to buy real estate or repair houses at many banks are quite low, at about 5-6 per cent per year.

For example, SHB is applying preferential interest rates from 5.79 per cent per year for home loan customers, with a loan term of up to 25 years. Customers can borrow up to 90 per cent of the property value.

Similarly, Sacombank is also spending VNĐ10 trillion in preferential loans for customers who want to buy, build and repair houses, or buy cars with interest rates from only 6.5 per cent per year.

At BVBank, home loan interest rates are being implemented with many flexible options from 4.99 per cent per year for the first six months, 5.99 per cent per year for the first nine months, 6.49 per cent per year for the first 12 months, 7.49 per cent per year for the first 18 months and 7.9 per cent per year for the first 24 months.

Attractive interest rates are also appearing at major banks. Accordingly, BIDV is deploying a housing credit package with interest rates from 5 per cent per year, with a loan term of up to 30 years.

Vietcombank is also spending VNĐ50 trillion for individual customers to borrow money to buy houses, build and repair houses and buy cars, with preferential interest rates from only 4.9 per cent per year in the first six months for loans under 24 months and from 5 per cent per year in the first 12 months for loans over 24 months.

At foreign owned banks, interest rates are also very attractive. Specifically, Shinhan Bank Vietnam Limited is applying a fixed lending interest rate of 5.2-6 per cent per year for the first 1-3 years.

Similarly, HSBC Vietnam is lending to customers at an interest rate of 5.5 per cent per year for 25 years, with a maximum loan value of up to 70 per cent.

Experts are quite optimistic about the possibility that credit will increase in the near future.

According to Dr. Cấn Văn Lực, chief economist at BIDV, real estate credit currently accounts for one fifth of the total outstanding loans. The early application five months ahead of schedule of new laws, namely the Land Law, Housing Law, Real Estate Business Law and Law on Credit Institutions, will contribute to promoting the recovery of the real estate market, which will help improve business performance of banks in the second half of the year, especially when lending interest rates remain low.

In agreement, economist Dr. Lê Xuân Nghĩa said real estate is still an important lending channel for banks, especially the low-cost housing segment. However, it is necessary to redesign preferential policies to promote the low-cost housing segment to increase supply in accordance with people’s financial situation.

Experts predict that low lending interest rates may remain until the end of 2024, but then are likely to increase if the economy recovers and credit increases. Therefore, banks will adjust up savings deposit interest rates, causing home loan interest rates next year to be higher than currently.

Therefore, experts recommend that customers should choose loan packages with fixed interest rates over a long period, which can help them stabilise financial plans and avoid shocks from interest rate changes. — VNS