Domestic banks set super low bottom

Home loan interest rates continue to hit rock bottom

In early December, several foreign banks simultaneously adjusted their home loan interest rates down sharply while domestic banks were quite leisurely. However, very quickly after that, many domestic banks lowered their interest rates to super low levels.

Currently, the lowest interest rate for home loans in December on the market belongs to Vietnam Prosperity Joint Stock Commercial Bank (VPBank). Accordingly, the rate applied by VPBank is only 5.9%/year. The maximum lending rate at this bank is 75%, the maximum term is 25 years.

The reason VPBank can implement a super low home loan interest rate policy is because the bank is applying a mobilization interest rate of less than 6%/year. From the beginning of November 2023, the mobilization interest rate at VPBank is 5.4%/year, applied to terms of 15 months or more and with a deposit value of over 10 billion VND.

It can be seen that the difference between VPBank's deposit interest rate and home loan interest rate is only 0.5%.

Super low interest rate for home loans from local banks, image 1 — After foreign banks simultaneously reduced interest rates for home loans, domestic banks lowered interest rates to super low levels. Illustrative photo

Global Petroleum Bank (GPBank) also offers many incentives for home buyers. The lowest rate applied by this bank is only 6.25%/year.

Meanwhile, since the beginning of November, in order to meet the needs of customers borrowing capital to buy houses, cars, etc. at the end of the year, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has simultaneously adjusted to reduce interest rates for many industries. In particular, the lowest interest rate for home loans is 7.5%/year for the first 18 or 24 months.

However, this December, the lowest home loan interest rate that BIDV offers to customers is 6.5%/year.

BIDV's home loan interest rates have dropped sharply as the Big 4 bank has continuously reduced its deposit interest rates. Accordingly, the highest rate at BIDV at the moment is 5.3%/year, applied to many terms of 12 months or more.

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) also applies a home loan interest rate of only 6.5%/year.

Ho Chi Minh City Development Joint Stock Commercial Bank (HDBank) is one of the units that receives the attention of depositors as it is in the Top banks with the highest deposit interest rates.

Accordingly, in the list applied from December 1, the highest interest rate at this bank is 8.4%/year, applied for a 13-month term and a minimum deposit value of 300 billion VND.

However, the home loan interest rate at HDBank is very low, only 6.8%/year.

Many other domestic banks also have low home loan interest rates, below 8%/year, such as Saigon Hanoi Commercial Joint Stock Bank - SHB (7.5%/year), Military Commercial Joint Stock Bank - MB (7.5%/year), An Binh Commercial Joint Stock Bank - ABBank (7.6%/year), Saigon Commercial Joint Stock Bank - SCB (7.9%/year).

Banks reduce interest rates, investors need to reduce real estate prices

On the morning of December 7, Prime Minister Pham Minh Chinh chaired a conference on promoting credit growth.

At the conference, the Prime Minister said that real estate businesses are complaining about difficulty in accessing capital. But in recent years, real estate prices have generally increased. If there are difficulties but the selling price is still kept the same, and there are still one-sided demands, is there a shared responsibility?

At the same time, the Prime Minister also requested real estate businesses to restructure the market segment appropriately and reduce product prices. Regarding the banking sector, the Prime Minister said that policies must be extremely flexible, we do not lower lending standards, but there needs to be flexibility.

According to the Prime Minister, in normal times there are normal policies, and in abnormal times there must be abnormal policies. In times of difficulty there must be policies based on the spirit of "harmonizing benefits and sharing risks" to be appropriate, correct, and promote development.

Responding to the proposal to continue reducing interest rates, State Bank Governor Nguyen Thi Hong said that despite high world interest rates, many countries still increased interest rates to tighten monetary policy, but in 2023, the State Bank boldly adjusted the operating interest rate down 4 times, regulated monetary policy reasonably, and the average new loans in the first 10 months of this year decreased by about 3%.

Thus, the new lending interest rate has returned to the level before the Covid-19 pandemic, which is a great effort of the banking industry. The Governor also asked banks to continue to reduce costs in order to continue to reduce interest rates.

Source