Unexpected home loan interest rates after incentives

(NLDO) - Many banks have launched home loan packages with "terrifyingly" low interest rates from 3.99% to 5.5% per year at first. Interest rates on old loans are currently much higher.

On February 22, Saigon - Hanoi Bank (SHB) is the latest name to "join the game" to deploy a loan package for young people to buy houses, after ACB.

Accordingly, from now until the end of 2025, SHB will deploy a VND16,000 billion loan package to serve the needs of home purchase with preferential interest rates from 3.99%/year. This is a record low interest rate on the market today, if calculated based on incentives in the initial period. Customers will be able to borrow up to 90% of the value of the property they intend to buy, with no limit on the loan amount.

Borrowers are also exempted from paying principal for the first 60 months - equivalent to 5 years - and are given an attractive credit card/overdraft limit.

"Customers taking out home loans can be flexible in choosing suitable collateral such as: valuable papers/deposit balance, real estate intended to be purchased through loan capital/other owned real estate or cars" - SHB representative informed.

Previously, Asia Commercial Bank (ACB) was the first commercial bank to launch a loan package for young people to buy houses, after the Prime Minister requested the State Bank and commercial banks to research and have a credit package for young customers.

However, according to the investigation of the reporter of Nguoi Lao Dong Newspaper, the preferential packages with low interest rates of ACB, SHB, PVcombank, Vietcombank, Agribank... are mainly in the initial period (3-6 months). After this period, the interest rate will be floating, calculated by the base interest rate plus a margin of 3%-4.5%/year. The interest rate after the preferential period is from 8%-10%/year.

The demand for bank loans to buy houses among young people is very large.

Immediately after the news of low-interest home loan packages, many people reported to Nguoi Lao Dong Newspaper that they had to pay interest on existing home loans which were not cheap. Ms. Ngoc Bich (living in Binh Thanh District, Ho Chi Minh City) said that she currently has to pay about 13 million VND per month in principal and interest on her home loan, with an interest rate of 11.7% per year. The home loan from several years ago still has an outstanding debt of more than 1 billion VND.

"I see banks announcing many new loan packages with preferential interest rates, but the old loan interest rates have not decreased. The interest rate of 11.7%/year has been applied by the bank for nearly a year now and has not been adjusted down," Ms. Bich complained.

Some others said they had to pay interest rates of 12%-13%/year, or even higher. Ms. Khanh Van (living in District 12, Ho Chi Minh City) said that her loan of nearly 2 billion VND at a foreign bank is still paying interest of 12.2%/year. This interest rate has also been applied all year, without any adjustment.

"Seeing information about other banks lending to repay debts, I also contacted them. But after the initial preferential period, the interest rate will be floating at about 10%-11%/year, not to mention having to buy additional life insurance. Until now, I am still struggling with this 12.2%/year loan" - Ms. Van said.

According to experts, interest rates are just one factor. To buy a house, borrowers also rely on many other factors such as their income and the supply of real estate projects. At the same time, borrowers also need to carefully calculate financial plans to ensure their ability to repay the debt. Avoid preferential interest rates at the beginning but then floating, high interest rates beyond their ability to pay.

Source: https://nld.com.vn/bat-ngo-lai-suat-vay-mua-nha-sau-uu-dai-196250222153535469.htm