[NEWS] - The "golden" time to borrow money to buy a house

Some banks offer housing loan programs with very low interest rates, with products equal to deposit interest rates to stimulate demand for the real estate market. However, according to experts, one of the reasons why this market is still quiet is that housing prices are still too high compared to people’s income.

Low interest rates, long-term to reduce debt repayment pressure

Currently, banks are deploying many home loan products with long terms to reduce debt repayment pressure for home buyers. Accordingly, banks that offer housing loans for up to 25 years with low-interest rates include VPBank 5.9%/year, GPBank 6.25%/year, and HDBank 6.8%/year. Banks lending terms up to 30 - 35 years have low interest rates such as BIDV 6.5%/year, Sacombank 6.5%/year, ShinhanBank 6.6%/year, ABBank 7.6 %/year. Some banks even lend with long terms and maximum loan rates of up to 100% of the value of the purchased house such as Agribank, BIDV, OCB, Sacombank, VietBank...

However, the above home loan interest rates are calculated in the first cycle. This period for joint stock banks is from 3-6 months; while the group of banks with dominant state capital applies a longer period, from 18-24 months... After the first cycle of interest rate incentives ends, the bank will calculate the lending interest rate based on the savings interest rate of 12 -13 months or 18-24 months plus 3-4.5%.

Home buyers with bank loans should also note: For early repayments, banks usually calculate in two cases. In case the customer repays the debt early while still enjoying the preferential interest rate, the fee is about 3-4%; If you pay your debt early at the floating interest rate, the fee is lower, about less than 3%.

The sharp decrease in deposit interest rates creates conditions for reducing loan interest rates

According to experts, home loan interest rates are at the lowest level in history. The reason why banks can sharply reduce home loan interest rates is because deposit interest rates have also decreased sharply compared to previous times and banks also have a temporary "surplus" of mobilized capital.

According to statistics from the Banking Times, the current average deposit interest rate for terms from 6 months to 12 months of the group of large banks is from 4.8-5.3%/year, while the interest rate of the Joint Stock Commercial Bank group is 4.8-5.3%/year. Mid-range ranges around 5.4%-5.8%/year, small-scale banks around 5.8-6.2%/year.

Dr. Vo Tri Thanh - Director of the Institute for Brand Strategy and Competitiveness Research, said that the sharp drop in deposit interest rates has created conditions for banks to reduce lending interest rates.

According to the latest statistics of the State Bank of Vietnam, the total outstanding credit debt for the real estate sector of the entire system to date has reached 2.74 million billion VND, accounting for 21.46% of the total outstanding debt for the economy. Of which, real estate credit focuses on consumption purposes - loans to buy and repair houses account for 64%, while outstanding loans for real estate business activities account for 36% of outstanding loans. used in the real estate sector.

Mr. Nguyen Duc Lenh - Deputy Director of the State Bank of Vietnam City branch. Ho Chi Minh said that in the first 9 months of 2023, real estate business credit will grow higher than the general credit growth rate, and higher than the same period last year. This shows that the solutions and efforts of the Government, the Banking sector, ministries, branches, and localities in removing difficulties and obstacles for the real estate market are gradually becoming effective. In addition, credit institutions also actively deploy loans under the Government’s housing support programs.

Despite recognizing the banking system’s efforts to remove difficulties and stimulate demand for the real estate market through sharply reducing interest rates and promoting credit growth, according to experts, the real estate market’s current Dynamics are still quiet, and liquidity has not improved much because there are still many problems such as high house prices, imbalance between supply and demand in segments, social housing development still faces many problems. juridical...

According to Cushman & Wakefield Vietnam, housing prices in Vietnam are currently about 20 times higher than the average annual income per capita, making it increasingly difficult for Vietnamese people to own a home. This situation requires rebalancing solutions, specifically developing social housing as a tool to ensure social security and promote the sustainability of the real estate market.

Speaking at a recent conference to discuss solutions to remove difficulties in credit growth for production and business to promote growth and macroeconomic stability, Prime Minister Pham Minh Chinh also raised the question. The problem is, that in recent years, real estate prices have increased in general. If there are difficulties but still want to keep the selling price the same, still demanding "one-way", is there a shared responsibility? Since then, the Prime Minister assigned the Ministry of Construction to guide real estate businesses to restructure segments and reduce product prices.

According to experts, falling real estate prices will have a much greater effect on stimulating demand than banks reducing interest rates, because people’s need to buy houses to live in is still very large.

Thanh Long (Collection source)