Home loans are still difficult

Commercial banks (NH) continuously launch real estate loan programs with unprecedentedly low interest rates, but borrowers are still afraid that interest rates will increase sharply after the preferential period. Meanwhile, the real estate market has not really recovered, supply is scarce and especially prices are still sky-high, not everyone can access them.

Race for preferential home loan

Talking to reporters of the Lao Dong Newspaper, people working in the banking and real estate sectors all said that banks have never launched so many home loan programs with super low interest rates as they do now. For example, large banks such as Vietcombank and BIDV are offering home loan packages with interest rates of only 5%-5.5%/year in the first 12 months and 6%-7%/year in the following 2-3 years.

Private commercial banks such as ACB, Eximbank, VIB, etc. have slightly higher preferential interest rates, but in general, they are all no more than 8%/year in the first years. To attract customers, each bank also offers many other preferential policies such as grace period (no principal repayment) up to 5 years, early repayment without penalty interest, etc.

Although lending rates in general and home loans in particular are said to have bottomed out recently, actual credit growth has not yet met expectations. The latest statistics from the State Bank of Vietnam in the first 4 months of 2024 show that the system's credit growth only reached about 1.5%, an improvement compared to the first 2 months of the year but still not equal to the same period last year. Many people who want to borrow to buy a house say that the interest rate is "very attractive" but are not ready to borrow to buy a house to live in, rent out or invest for many reasons.

Mr. Tran Minh Tam (residing in Go Vap District, Ho Chi Minh City) said that what he is most concerned about right now is how banks will calculate interest rates after the preferential period. "The bank said that after the preferential period ends, they will take the base interest rate plus a margin of 2.5% - 3.5% or apply a floating interest rate, which is unclear. I don't know what the base interest rate or floating interest rate is to calculate the ability to repay the debt. Not to mention, if I repay the debt early, I will have to pay a penalty fee of 1% - 4%, which makes me very hesitant," said Mr. Tam.

Meanwhile, according to our research, the floating interest rate is being applied by many banks at 9% - 10%/year, much higher than the preferential interest rate in the initial period. With this interest rate, those who need to borrow to buy houses and land must consider very carefully.

Home loan interest rates are low, but many people are still hesitant to "put down money" to buy a house to live in, invest in, or rent out... Photo: LAM GIANG

The market is still difficult, investors worry about "holding debt"

Ms. Hoai Thu (living in Binh Thanh District, Ho Chi Minh City) said that she has about 4-5 billion VND in finance and wants to buy an apartment or townhouse for investment but does not dare to "put down money". "Many credit officers advised me to borrow about 1.5-2 billion VND more to buy high-end real estate that the seller is "cutting losses", waiting for the market to recover to sell for profit.

But I realize that in the current condition of the Ho Chi Minh City real estate market, buying for investment "surfing" is very difficult. If unfortunately the preferential interest rate period expires and the house is not sold, then the debt and interest will be very large" - Ms. Thu analyzed.

In fact, according to records, up to this point, there are still many investors who are having to "hold" real estate and struggle to pay bank interest of tens of percent for the past 2 years since the market froze.

Some people even borrowed money to buy 2-3 plots of land or apartments; pooled money with friends to buy real estate in the province for tens of billions of dong... when the market was hot, now the price has dropped so much, they can't cut their losses, so they have to take on debt and pay billions of dong in interest every year.

Regarding floating interest rates, a senior leader of the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) said that for a long time, many banks have based their base interest rates on the average 12-month deposit interest rates of 4 major banks (Vietcombank, Agribank, VietinBank, BIDV).

Home loan borrowers can monitor the trend of savings interest rates at major banks to know the base interest rate, then calculate the lending interest rate. From there, calculate the monthly repayment amount after the fixed interest rate period ends.

To avoid "going broke" when borrowing to buy real estate, a Vietcombank transaction office manager recommends that in addition to interest rates and loan-related costs, borrowers need to carefully calculate other factors such as whether their income is stable or not, and how much of their family's living expenses (children's tuition, the need to study to improve knowledge, exercise, reserve funds for unexpected expenses, etc.) will take up. "From there, borrowers can choose the loan interest rate and interest rate fixing period that suits their financial capacity," said a Vietcombank transaction office manager.

Prepayment is difficult

Recently, Nguoi Lao Dong Newspaper received a number of complaints from home buyers about suddenly receiving notices of interest rate increases without clearly stating the basis for calculating interest.

There are customers who have taken out home loans in the past, and now they still have to pay interest of up to 12%-13%/year, even though the lending interest rate has dropped sharply in the past six months. In addition, some people have reported that when they paid off their home loan early, they were made difficult by credit officers; when they borrowed from other banks to pay off their debt early, they were also made difficult and not allowed to pay off their debt...

Source: https://nld.com.vn/cho-vay-mua-nha-van-kho-196240501211147259.htm