Foreign banks decrease sharply, domestic banks still leisurely

In November, the wave of interest rate reduction entered a new cycle. Interest rates were brought down to a new very low level by the Big 4 group (including 4 state-owned units: Joint Stock Commercial Bank for Foreign Trade of Vietnam - Vietcombank, Joint Stock Commercial Bank for Investment and Development of Vietnam - BIDV, Joint Stock Commercial Bank for Industry and Trade of Vietnam - VietinBank and Vietnam Bank for Agriculture and Rural Development - Agribank).

Therefore, home loan interest rates are expected to decrease rapidly in December. However, currently, foreign banks are more agile in reducing home loan interest rates, while domestic banks are more “slow”.

Foreign bank home loan interest rates decrease after remaining unchanged — While some foreign banks have sharply reduced interest rates on home loans, many domestic banks are still taking it easy. Illustrative photo

Foreign banks decrease sharply, domestic banks "slowly"

Shinhan Bank, a bank from Korea, has adjusted its home loan interest rates the most aggressively. After applying a reduction of up to 1%, the interest rate at Shinhan Bank has dropped to only 6.6%/year, the lowest in this credit segment. However, the preferential period is quite short, only the first 6 months. Shinhan Bank's maximum loan rate is among the lowest in the market at 70%.

Thus, after exactly 1 year, home loan interest rates at Shinhan Bank have decreased sharply, down 4.3% compared to 10.9% in December 2022.

The rate of interest rate reduction at Hong Leong Bank is much lower than at Shinhan Bank. Currently, the common interest rate at the Malaysia-based bank is applied at 7.3%/year, down from 7.5% in November 2023. In December 2022, the interest rate at Hong Leong Bank was up to 13%.

Meanwhile, Woori Bank and HSBC still maintain home loan interest rates at 7.2% and 9.75%.

Meanwhile, domestic banks are still quite leisurely, not adjusting their listed rates. Some units still have rates above 10%/year. They are Maritime Bank - MSB with 10.99%/year; Tien Phong Commercial Joint Stock Bank - TPBank with 10.7%/year and Techcombank with 10.5%/year, unchanged from the previous month.

Previously, MSB was often on the list of banks with the lowest home loan interest rates at only 4.99%/year. However, this preferential rate was only applied for a short period of time.

Some banks with home loan interest rates lower than 10% include Vietnam Public Joint Stock Commercial Bank - PVcomBank (9%/year); Orient Commercial Joint Stock Bank - OCB (8.49%/year); Saigon Commercial Joint Stock Bank - SCB (7.9%/year). In particular, SCB attracts attention with a maximum loan rate of up to 100%.

Priority for the first house

At the Credit Conference for Real Estate and Social Housing Development held in mid-November this year, a representative of Vietnam Prosperity Joint Stock Commercial Bank - VPBank assessed that from the perspective of individual customers buying houses for their own use, the interest rate for home loans is still high, affecting the demand for loans of home buyers.

However, VPBank balances and identifies lending in the real estate sector as one of the important areas. In particular, focusing on consumer real estate, i.e. lending to individuals to buy houses, for consumption purposes, for self-use, prioritizing social housing for low-income people, lending to industrial parks, export processing zones in accordance with the direction of the Government, the State Bank, being cautious and tightening on tourism real estate, resorts, and condotels.

Meanwhile, a representative of the Vietnam Joint Stock Commercial Bank for Industry and Trade - VietinBank said that the bank is always a pioneer in implementing policies and orientations of the Government and the State Bank and coordinating with local authorities in supporting businesses, and is one of the leading credit institutions in implementing preferential interest rate support for customers according to Decree 31.

VietinBank has a policy of partial interest rate support for people buying their first home to live in (the support level can be 2% by supporting production and business according to Decree 31) and/or has a specific loan interest rate support mechanism for customers buying real estate to stabilize the market and support credit institutions to finance customers.

VietinBank continues to facilitate access to credit capital in the real estate sector for both corporate and individual customers to serve real and legitimate credit needs, feasible projects/loan plans, ensuring legality, projects that can be completed and put into use soon; especially for real estate segments with potential/development prospects, in line with the orientation of the Government and the State Bank such as industrial park real estate, urban residential real estate, housing for workers, social housing.

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