Survey on the market shows that the home loan interest rates are divided into two parts, including preferential period and normal period.
The home loan interest rates are popular seven to nine percent per annum, applicable in preferential period (usually six months or one year). From the second year, lending rates are based on a base interest rate plus a margin of three to four percent per annum depending on each bank.
According to the survey, borrowing home loans is currently not too difficult when borrowers use the apartments to mortgage. However, the preferential interest rates and the interest rate margin added after the preferential period is significantly different among banks.
A credit staff of a branch of Commercial Joint Stock Bank for Foreign Trade of Vietnam (Vietcombank) in Thanh Xuan district (Hanoi) said that the lending interest rates at his branch is currently 8.1 percent per annum, applicable for the first year. However, the bank offers a preferential rate of 0.2 percent for customers having salary paid via Vietcombank. From the second year, lending interest rate is equivalent to 12-month interest rate plus a margin of 3.5 percent.
At Commercial Joint Stock Bank for Investment and Development of Vietnam (BIDV) Dong Do branch (Hanoi), the home loan interest rate in the first year is 7.8 percent per annum. From the second year, lending rate is calculated by 12-month deposit interest rate plus 3.7 to four percent.
Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank) Trang Tien branch applies 9.6 percent per annum in the first year, and 11 percent per annum from the second year.
At a branch of Military Commercial Joint Stock Bank (MB), the lending rate of home loans in the first three months is nine percent, and 10.5 to 11 percent per annum afterwards. The bank is applying programmes with fixed interest rate of 8.6 percent per annum in six months and 12 months.
Some smaller private joint stock banks classify preferences in packages and terms. Maritime Commercial Joint Stock Bank (MSB) provides three different real estate packages at interest rates of 6.9 percent, 8.49 percent and 9.49 percent per annum, respectively for six-month, 12-month and 18-month period. After the preferential period, the interest rate will be calculated based on the 12-month deposit rate plus a margin of 3.5 percent.
A branch of Tien Phong Commercial Joint Stock Bank (TPBank) applies home loan interest rate of nine percent in the first year. From the second year onwards, the margin is 3.3 percent and then 4.4 percent.
In fact, many banks are quite cautious in disbursing capital to real estate sector. A credit staff of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) Thanh Tri branch said that his branch almost does not offer home loans and there is no package for real estate. Customers borrow at interest rate of 13 percent per annum and secure the loans by the purchased real estate.
A leader of Sacombank also shared with NDH that his bank also limits real estate lending, and loans from several hundred million dong needs approval of the director. “This was not required in the past,” said the leader.
Meanwhile, director of a branch of Military Commercial Joint Stock Bank (MB) said that the real estate tightening in MB at the present time only affects investors and has not affected individuals borrowing loans to buy residential houses.
From the beginning of the year, the draft circular replacing Circular 36/2014 of the State Bank of Vietnam (SBV) stipulated that the ratio of using short-term fund for medium and long-term would be reduce to 40 percent at then to 30 percent at least by 2022. This is one of the SBV’s moves to restructure the capital quality in the economy, which has influenced real estate in particular and some other sectors.
Some regulations on real estate lending have also been tightened, such as raising the risk factor of real estate loans from 150 percent to 200 percent, or proposing to increase the risk factor by three times for loans with outstanding loans of above three billion dong, etc.
According to MSB Securities Company, the SBV’s move aims to control the capital flowing into real estate when there are concerns about real estate bubbles as the sector has been in an acceleration cycle since 2013 until now, in addition to some signs of instability in the market.
Nguyen Quoc Hung, director of the SBV’s Credit Department said that loans still need to be offered to effective projects with capable investors. Real estate lending can be divided into two objects, direct lending to real estate area or lending consumer loans to buy real estate which is real estate and housing assets.
By the end of 2018, the total outstanding credit growth related to real estate was 31.7 percent. In which, direct lending levelled off but consumer lending for real estate purchase surged.
