Bank loans to buy a house: 'Floating' interest rates usually do not increase or decrease too much

Young people buying a house need to consider their actual income to borrow - Photo: NGOC HIEN

Young people have a real need to buy a house to live in, but with that comes the worry of interest and principal repayment. Young people who have never borrowed before are worried, but those who have borrowed and successfully bought a house agree.

A reader commented: "Borrowing is not the problem. The biggest problem is not focusing on paying interest and principal, but spreading it out too much, leading to failure of the set plan."

Divided into two camps about bank loans to buy houses

Reader AD, when reading the article "Bank Director: Young home buyers must 'take advantage' of banks, don't be afraid to borrow" commented: "For banks to make a profit, interest rates must be low at the beginning, and consultants do not explain thoroughly or use confusing words.

In addition, a home loan is a 20-year plan, and there is no "insurance" for unexpected events such as illness, or simply an economic crisis leading to unemployment. Is it effective to implement such a 20-year plan?

The psychology of taking out a long-term bank loan to buy a house still has two opposing extremes, some readers agree, some are not "enthusiastic". One reader wrote: "Don't take out a loan for up to several decades. That's not a plan, it's a gamble. Who knows what will happen during those decades that will affect the debt repayment plan?"

The advice to take advantage of the bank to borrow money to buy a house from the director of Vietcombank Quang Ngai was agreed by reader Pham Thiet Hung with the comment: "I completely agree with the opinion that if you want to own a house, you have to borrow money. Except in special cases, you don't have to borrow money. If you borrow from your parents, siblings, relatives, friends, that's fine, even if you pay interest.

When borrowing from a bank, you should carefully consider the repayment plan so that it has the least impact on your family's daily life. My husband and I also had to borrow money to buy a house. Not just once, but four times. Because after buying, we strive to buy a better house, sell the previous house, and borrow money to buy a new one. We have to try, guys."

In addition, many readers are hesitant about interest rates. Reader Pha SiL shared: "Consider carefully before signing a bank loan to buy a house, because the current preferential interest rate only applies for 12 - 24 months. If you want to buy a house, the actual amount must be over 75% of the value of the house and the rest should be borrowed from the bank."

Similarly, reader Lai Quang Tan said: "Yes! Borrowing is fine, but the issue of how to repay the debt is important." Reader Trung Kien wrote: "People who have a real need to buy a house are very afraid of floating interest rates after the first 2-3 years of preferential interest rates... The future and interest rate adjustment policies really need to be reviewed."

If you really want to buy a house, you need to research and buy at the right time - Photo archive

"Interest rates are usually stable and decrease over the years"

According to Mr. Vo Van Linh - Director of Vietcombank Quang Ngai, young people borrowing from banks to buy houses comes from real needs, not speculative investment. His advice for young people to borrow from banks is completely against borrowing without a specific financial plan.

"I always tell you not to spend beyond your means. Borrow within your means based on your actual income. Principal and interest accounting for 60% of your income is fine," said Mr. Linh.

Bank loans must be paid with interest. Therefore, buying land in the right location, at the right time, at the right price and within your means is very important.

Contrary to the concerns of many readers who think that long-term loans of 20 to 30 years are risky, Mr. Linh believes that it is a smart way to borrow, dividing the repayment time and interest, reducing pressure on life.

"Young people borrow for 30 years, but after the first 5 years, they pay the interest and principal as committed. By the 6th year, if they have money, they can pay in full and terminate the loan without incurring any penalties or fines for breach of contract. In addition, over the years, they have gradually paid off the principal, so the interest has gradually decreased, and the monthly payment has also decreased," Mr. Linh affirmed.

Regarding the issue of unstable interest rates, with his experience, Mr. Linh believes that interest rates are usually stable, if there is an increase or decrease, it is not significant. The stable interest rate cycle usually lasts 10 years. The problems of economic recession cause interest rates to change abnormally.

"My advice is for young people to have a suitable perspective and consider the option of buying a house and stabilizing their lives soon. Because young people's savings cannot keep up with the rate of increase in real estate prices. In addition, if you buy a house to live in, you will no longer have to pay rent. That amount also accounts for a large part of the cost of paying interest on loans," said Mr. Linh.

This bank director said he shares his experience with young people who have real housing needs.

In addition, if you want to buy a house, young people should learn about the financial plans of friends and siblings around them to find a suitable solution for themselves.

Source: https://tuoitre.vn/vay-ngan-hang-mua-nha-lai-suat-tha-noi-thuong-khong-tang-giam-qua-muc-20240520162542004.htm