In early July, home loan interest rates dropped significantly, with many banks offering interest rates below 10%/year. For example: Woori Bank applies an interest rate of 7.8%/year; Shinhan Bank - 7.99%/year for the first 6 months and 10.5%/year for the remaining 54 months. TPBank applies an 8% rate for home loan customers in the first 6 months, and 12%/year for the next 6 months. From the 13th month, floating interest rates will also be calculated according to the market, about 13.5%/year.
Some other banks also have preferential loan rates such as: HDBank (8.2%/year), VIB (8.5%/year), Eximbank (8.5/year), SeABank (9.29%/year), UOB (9.49%/year), Sacombank (9.5%/year).
Besides, the Big 4 group including Vietcombank, BIDV, Vietinbank, Agribank also has very preferential loan rates.
Mortgage rates are down, but the market needs more to recover.
Specifically, BIDV has a home loan interest rate of 7.8%/year; Agribank is 8%/year; Vietinbank is 8.2%/year; Vietcombank is 9.5%/year.
However, the interest rate below 10% is only applicable for 3 - 6 months, the highest is 1 year. After the preferential period, most banks calculate floating interest rates, commonly at 12 - 13.5%.
Evaluating this interest rate, experts say that although home loan interest rates have shown signs of cooling down, there will not be a sharp decrease in the last 6 months of the year. The preferential rate is only applied for a short time, so it will not have much impact on buyers' psychology.
Accordingly, at present, floating interest rates at some commercial banks are still commonly at 12 - 13.5%. Some banks even have interest rates of 14.2% after the preferential period ends. This interest rate is expected to last longer and is unlikely to decrease further to below 10%.
Experts from Batdongsan.com.vn also said that to return to the period of “cheap money”, the market will need many factors to influence. Therefore, in the short term, it will be difficult to expect a sharp decrease in interest rates.
In 2024, interest rates may continue to decrease but will hardly be lower than 10%. Therefore, it is difficult to expect a short-term market recovery because interest rates are not really attractive.
According to the Vietnam Real Estate Brokers Association, cash flow is showing signs of returning to the market, with a customer having access to a new loan with an interest rate of 10-11%. However, the real estate market will only react when the average interest rate drops below 10% because 10% is the number that investors can afford to borrow.
However, interest rates are only one of the factors affecting the real estate market. The current interest rate reduction only supports individuals with floating interest rate loans and is not attractive to those in need of loans.
Meanwhile, the real estate market still has to wait for liquidity to recover, which will only improve when investors' confidence in the market returns and the economy's internal state returns to good condition.
According to Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS), the interest rate reduction is good news for the market, but does not completely determine the recovery of the real estate market.
“ The important issue now is that many projects have not yet resolved their legal issues, and there are not many quality products on the market. Therefore, even though interest rates are reduced and money is flowing into the market, there are no products to buy. In my opinion, the root problem of reviving the market still needs to thoroughly resolve legal issues. This is the key issue for the real estate market to develop sustainably and healthily, ” said Mr. Dinh.
How much do home buyers expect interest rates to fall?
Recently, Batdongsan.com.vn conducted a survey on people who want to buy a house about whether they need to use financial leverage.
According to the survey, more than 73% of people said they need to borrow money from banks to buy a house and only 27% do not borrow. Of the customers who need to borrow money to buy a house, up to 41% need to borrow less than 30% of the product value, 30% have to borrow from 30 - 70% of the house value.
According to the results of this study, when discussing the expected interest rate for home loans in 2023 - 2024, about 44% of respondents said that a home loan interest rate below 8% is reasonable for them to manage their finances and expected the interest rate to decrease to this level in 2024.
In addition, 33% of home buyers accept loans if the interest rate ranges from 8-10%, and only about 14% agree with the interest rate from 10-13%.
According to Mr. Le Bao Long - Strategy Director of Batdongsan.com.vn, the reason why many home buyers do not dare to boldly use financial leverage is because they are worried about economic difficulties, unstable jobs, and uncertain incomes, causing them to feel pressured and unable to afford the loan interest.
“ Most families with incomes under 40 million VND/month can only spend a maximum of 20 million VND or less to pay for buying real estate every month. The group with incomes over 40 million VND/month can only accept the cost of paying off fixed monthly home loans not exceeding 30 million VND. For the group of low-income customers, under 20 million VND/month, this number falls around 8 - 10 million VND at most ,” Mr. Long shared.
Up to now, interest rates and house prices have been two factors that greatly influence the decision to buy a house. This is also the problem that many people with real housing needs but need to use financial leverage have not been able to decide, because the mobilization interest rate is still at a high level compared to the time before the COVID-19 pandemic.
Also through the survey of Batdongsan.com.vn shows that 72% of home buyers assess that current real estate prices are still at a high and very high level, beyond the ability to pay of most workers in the current market. 75% of those surveyed stated that current lending interest rates are also at a high and too high level, causing many people to not dare to borrow.
Besides, complicated lending procedures also make many people unable or unwilling to approach capital mobilization channels from banks.
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