Easy to buy a home but high interest

Despite the credit squeeze, all banks spend a certain amount of capital to prioritize borrowers to buy houses to live, only the interest rates are no longer cheap.


In need of a loan of about 1.4 billion to buy an apartment, Ms. Ngoc Thuy (living in District 2, Ho Chi Minh City) contacted the staff of some banks in Ho Chi Minh City for advice. The banks are willing to disburse her loan, provided that they have to prove that their income is able to repay the loan, the apartment is intended to be purchased with full legal papers, borrowing less than 70% of the value of the apartment. The interest rate is from 10.5% to 12.5%/year.


Easy to borrow


The paperwork is fast, simple, but the interest is what she considers. "Calculated each month, both principal and interest, I have to pay about 15-16 million. This is a bit pressure compared to the income of the couple" - Ms. Thuy confided.


Recently disbursed 2.5 billion VND to buy a house in Thu Duc District, Ho Chi Minh City, Mr. Ba Dung (freelance business), said the interest rate he borrowed at Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) is 9, 2%/year in the first year. From the 2nd year onwards, the interest rate will be adjusted according to the market, currently around 11%/year. "Calculated every month, the principal and interest I have to pay about 30 million. From the day I borrow to buy a house, I have to try to do more, get more outside work to cover family expenses and repay the debt." - Mr. Dung shared.


As noted by reporters, all banks now have credit packages for people who need to buy houses rather than squeezing as many people think, but the interest rates are from 0.5% -1.5%/year higher than before. For example, An Binh Commercial Joint Stock Bank (ABBANK) has just spent 3,600 billion dong of credit package for individual customers to buy houses and consumer loans with interest rates from 7%/year fixed in the first 6 months. Vietnam Joint Stock Commercial Bank (PVcomBank) has a package of loans for buying, building and repairing real estate with the interest rate of 7.49%/year for the first 6 months; 8.99% pa for the first 12 months, lending up to 85% of collateral value, accepting various types of collaterals...


However, the sharp increase in housing prices over the past two to three years requires borrowers to buy houses with more accumulated money or accept more loans, meaning that the principal and interest are quite large monthly. Currently, a mid-class condominium apartment area in District 2, 9, Go Vap, Binh Tan... costs at least 2-3 billion instead of 1-2 billion as before. Buyers can borrow up to 70% of the value of the apartment (average from VND 1.5-2 billion), with the current average interest rate from 11% -12%/year, calculated each month the borrower must pay lowest 15-20 million dong principal and interest, repayment time is longer than before. "My family's income of 2 couples if less than 30 million probably I do not dare borrow banks to buy houses at this time" - Mr. Dung concluded.


An apartment project in Ho Chi Minh City with the guarantee and loan support of the bank. Photo: Tan Thanh


Interest rates will increase


Mr. Hoang Viet Cuong - Director of Business Division, Nam A Commercial Joint Stock Bank (Nam A Bank) - said that the current interest rate for buying house banks is 11% -12%/year, depending on customers, time of borrowing. short or long term. This interest rate has increased by about 0.5-0.7 percentage points from the previous year. Currently, banks still have credit limit and loans to buy houses to stay in priority banks so they do not worry about lack of capital, only interest rates inch up, so customers also consider. "Home loans are usually medium and long term, so banks have to mobilize medium and long term capital sources with higher interest rates than last time. This partly explains the reason why home loan interest inched up" - Mr. Hoang Viet Cuong analysis.


Leaders of some other banks recognized that deposit interest rates in the past time have increased significantly compared to the previous period, especially interest rates for medium and long-term savings. Currently, many banks are mobilizing with interest rates for above 12-month terms of 8% or more, so it is difficult for interest rates to buy houses to decrease in the near future. Not to mention, the coefficient of risk applied to home loans is quite high in the context that the real estate market is risky, forming a new price level...


In the draft circular replacing Circular 36 of the State Bank stipulating the limits and prudential ratios in operations of credit institutions, branches of foreign banks recently, the State Bank provided loans. buying real estate with a debt balance of over VND 3 billion will apply a risk factor of 150%; from 1.5 to 3 billion, apply the coefficient of 100%... The new regulation aims to direct real estate credit to the real needs of the people, promoting the development of affordable housing segment and housing society. According to commercial banks, although the above regulations have not yet taken effect, banks have begun adjusting to suit the new regulations and it is difficult to avoid interest rates on real estate loans that will continue to go up.


According to Thai Phuong