New borrowers are reluctant to borrow because of high interest rates.
My Tam, a communications officer in Hanoi, was informed two weeks ago by a credit officer at SHB that the bank had issued a document reducing loan interest rates. This person said that if she knew anyone who could borrow capital for business , she should introduce them to her and emphasized that "she was guaranteed not to be forced to buy life insurance."
However, when asked, Tam learned that this was a social housing loan product for low-income people. She thought she did not belong to this category. Last weekend, she continued to ask a credit officer at a SHB branch in Hanoi and was informed that the interest rate for home loans was around 15.3%/year.
"I was surprised because I thought mortgage interest rates had cooled down. When I asked again, the credit officer said only savings interest rates had decreased, how could loan interest rates decrease so much?" Tam said.
According to the above credit officer, 15.3%/year is the preferential interest rate for the first year, from the second year, the base interest rate plus margin will be applied. Every 3 months, the base interest rate will change once depending on the market, plus the margin to get the lending interest rate.
Home loan interest rates remain sky-high (Illustration: Manh Quan).
Remembering that 2 weeks ago, he was told that he would not be forced to buy insurance, Tam asked about this further, but this employee replied that "insurance is now a mandatory condition" when borrowing and introduced Dai-ichi insurance products to be able to support the best loan application.
Afraid of borrowing high interest rates, My Tam sought advice from a credit officer at TPBank. This person said that the bank offered preferential interest rates for home loan customers in the first 6 months of 8%/year, and in the first year of 12%/year. After the preferential period, floating interest rates were also calculated.
The margin at this bank is 4%/year, and the base interest rate will change every 3-6 months, the bank adjusts according to market developments. Small or medium-sized banks with high deposit interest rates will also have high lending interest rates.
But the margin of 4%/year is not the highest. When asking for a loan at HDBank, My Tam received advice on a preferential interest rate of 13.5%/year for the first year. From the following year, the base interest rate will be calculated plus a margin of 4.5%/year.
Deposit and lending interest rates have decreased compared to the end of 2022 but are still high compared to actual demand (Illustration: Tien Tuan).
Many banks now have preferential packages for the first year, with floating interest rates calculated from year 2. However, the first year's interest rate is also commonly over 10%/year. At Techcombank, the fixed real estate loan interest rate for the first 12 months is 12%/year for customers who have transacted with the bank before 2023; for new customers, the first year's interest rate is 13.9%/year. At VietinBank, the preferential loan interest rate for the first year is 10.5%/year, at GPBank it is 11.3%/year, VIB is 12%/year, PVcomBank is 12%/year, etc.
Banks also set out regulations on maximum loan terms, commonly 20-35 years for customers borrowing to buy real estate. The maximum loan amount ranges from 60-80% of the property's appraised value. Banks also apply early repayment fees, ranging from 1-3%.
Borrow 300 million VND, pay total over 500 million VND in 8 years
Last weekend, Ms. Thuy Linh, who currently works in Hanoi, also contacted a credit officer at VPBank to borrow 300 million VND as a mortgage to buy a house in 8 years. This officer said that the preferential interest rate for the first year is 13.3%/year, and from year 2 it will be floating.
Interest rates are still 2-3.5% higher per year than the same period last year (Illustration: Manh Quan).
After collecting all the necessary information, this person sent Ms. Linh an interest calculation table. "With a loan of 300 million VND, after 8 years, the total amount of principal and interest to be paid is more than 500 million VND. However, the staff said that each month there might be a difference of a few hundred thousand VND, and the loan period is up to 96 months," Ms. Linh said.
Continue to contact a VPBank employee to consult about the unsecured loan form, this person said the interest rate is calculated based on the decreasing balance.
"Interest rate is 0.8-1.8%/month, depending on the profile conditions. The better the profile, the lower the interest rate," this person said and asked to provide the name of the agency and salary statement for the last 3 months.
"I thought the lending interest rate had dropped, but in fact the decrease was almost negligible," said Ms. Linh, adding that she saw no difference between the current interest rate and the end of 2022.
Old customers bear the burden of interest
Ha Trang, currently working in Ho Chi Minh City, borrowed 900 million VND to buy a house in June 2020 with a preferential interest rate of 11.9%/year for the first year. Currently, the interest rate has increased to 14%/year. "Recently, I read in the newspaper that the mobilization interest rate has decreased, thinking in my head that the base interest rate will also decrease, but when I asked the credit officer, there was actually no difference," Trang said. Currently, Trang is still burdened with a debt of nearly 500 million VND.
According to the State Bank, 22 banks reduced loan interest rates in February 2023. However, the reduction was 0.4%/year and only reduced the average interest rate of newly incurred loans.
Cooling down of deposit interest rates is just a short-lived joy (Illustration: Huu Nghi).
Dan Tri 's survey shows that most banks' home loan interest rates have been adjusted, with a reduction of 0.2-3%/year. However, the reduction is only applicable for a certain period of time. Recently, mobilization interest rates have cooled down, however, credit officers all said that for new borrowers, after the first year of preferential treatment, the interest rate is still unclear as it is now, so it is difficult to calculate in advance.
In addition, the actual interest rates for deposits and loans have decreased compared to the end of 2022, but are still high compared to actual demand. The lending interest rate is still 2-3.5% higher per year than the same period last year.
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