“**Lower Interest Rates and Extended Promotional Period for Loans**”
Yesterday, the State Bank announced a preferential loan package for people under 35 years old to purchase social housing with an interest rate of only 6.1%/year, applicable for the first 5 years, and the next 10 years will have a lower interest rate of 1% compared to the general level. The list of 9 participating banks includes: Agribank, BIDV, Vietcombank, VietinBank, HDBank, VPBank, Techcombank, TPBank, and MB.
Thus, compared to the VND 120,000 billion credit package for social housing, which has now increased to VND 145,000 billion, the interest rate is 0.5%/year lower. The promotional loan period for the first 5 years is the same, and the new package also offers an additional 10-year preferential period.
Mr. Ngoc Duong (Thanh Xuan, Hanoi) said: “Before, I bought a social housing project in Nam Tu Liem district, Hanoi, but when I inquired about the VND 120,000 billion package, the interest rate was over 8%/year, which was beyond my family’s income. Now I see that the new package has a lower interest rate, but my family has already received the house and moved in, so we are not eligible for the loan.”
Meanwhile, Ms. Minh Hang (Hoang Mai, Hanoi) shared: “I see one loan package after another for social housing, with very little difference in interest rates, while what young families like us hope for is new projects to buy, but Hanoi is deploying very slowly. If the supply issue is not resolved, a few more preferential credit packages will not solve the problem.”
Talking to reporters, Mr. Nguyen Quang Huy, an expert in Finance and Banking at Nguyen Trai University, said that in the context of the real estate market undergoing restructuring and recovering after a prolonged stagnant period, the State Bank’s decision to deploy a preferential credit package for people under 35 years old to buy social housing is an important policy move.
Accordingly, identifying young people under 35 years old as the beneficiaries of the preference is a clear demographic orientation signal – showing that policy thinking has stepped out of the framework of “short-term hardship support” towards building a long-term future.
Many credit packages for social housing but lack of projects for loans. |
“With an interest rate of only 6.1%/year in the first 5 years and continued support in the next 10 years, this is one of the longest preferential credit packages to date. This demonstrates a strong commitment to implementing the goals of Resolution 33 and the National Housing Development Strategy by 2030 – considering social housing not only as a welfare issue but also as an important component in the structure of a sustainable real estate market,” said Mr. Huy.
Will the new credit package remain on paper?
Looking back at the implementation of the VND 120,000 billion credit package for social housing launched in 2023, Mr. Huy said that this package has faced many obstacles in implementation.
According to a recent report by the Ministry of Construction, since its implementation, the State Bank has reduced the interest rate for the VND 120,000 billion package four times. Specifically, from July to December 2023, the lending rates for home buyers and project investors were 8.2% and 8.7%, respectively.
In the first half of 2024, the lending rate for this package was reduced to 7.5-8%/year, and then reduced by another 1% in the second half of the year. From the beginning of 2025, the State Bank announced that the lending rate for this package would be 6.6% for investors and 6.1% for home buyers.
Thus, since its implementation, the lending rate for the VND 120,000 billion credit package has been reduced by more than 2%. This rate is currently lower than the lending rate for social housing buyers under Decree 100 (about 6.6%/year). However, the disbursement progress of this credit package has been slow. According to the Ministry of Construction, there are currently 97 social housing projects in 38/64 provinces and cities that have been announced eligible for borrowing.
The disbursed amount from this credit package is estimated at about VND 3,400 billion, equivalent to a disbursement rate of over 2%. Of this, about VND 2,940 billion was lent to investors of 21 projects, and the rest was lent to home buyers. In the first four months of this year, the disbursed amount reached more than VND 550 billion.
Mr. Huy assessed that the three biggest bottlenecks of the old package, which are also existing challenges for the new package, are: Insufficient and unsuitable supply of social housing. Land scarcity, complex legal issues, and low profits make investors less interested. The approval process for projects is slow, and the number of approved projects is not large enough to create an attractive scale and product diversity.
“The new package faces difficulties because young people often have unstable incomes, lack savings, and lack collateral. Commercial banks, without a risk-sharing mechanism, have to maintain strict credit standards, which diminishes the “preferential” nature of the package. Banks are cautious, and customers face challenges in meeting the requirements, which may cause the new package to remain on paper,” said Mr. Huy.
Mr. Huy emphasized that credit policies, if they only offer low-interest rates without accompanying implementation support mechanisms, can become inaccessible.
“Introducing multiple loan packages is positive, but if the root cause of the supply issue is not addressed, all preferential credit will face challenges in a congested ecosystem,” affirmed Mr. Huy.
Mr. Nguyen Tri Hieu, a financial and banking expert, said: “I think the lending rate of the new loan package for social housing is still very high and unstable. The current rate of “6.1%/year until June 30, 2025″ is slightly lower than the commercial rate, but it is still high for the majority of low-income people. After June 30, 2025, the interest rate will be adjusted and will still revolve around this level.”
According to Mr. Hieu, if the government wants to implement the social housing program, it should provide capital to commercial banks at a very low-interest rate of a maximum of 3%/year so that commercial banks can lend to people at an interest rate of about 5%/year.
“At an interest rate of 5%/year, a person can buy a house worth VND 1.2 billion, borrow VND 1 billion, and pay the bank VND 7 million per month for principal and interest, which is more reasonable. Otherwise, it will be just another story of people struggling to repay their loans,” said Mr. Hieu.
Ngoc Mai
“Deputy Minister Do Thanh Trung: The Ministry of Finance Cannot Promote Public Investment Disbursement Alone”
At the regular Government press conference for May, held on the afternoon of June 4th, leaders and representatives from various ministries and sectors provided information, clarifications, and insights into issues that have been the subject of public and media attention. Regarding the progress of public investment disbursement, Deputy Minister of Finance Do Thanh Trung shared that the performance in the first five months of this year surpasses that of the same period last year, both relatively and absolutely. He also outlined a set of solutions to achieve the target of 100% disbursement.
What’s Next for Hanoi’s Apartment Prices?
The real estate industry leaders in Hanoi predict that condo prices have peaked and cannot rise further as they have surpassed what buyers can afford. Prices are expected to stagnate until the end of 2025 and then enter a prolonged downward cycle, with the bottom falling out in the 2028-2030 period.
Allow Private Investors to Develop Social Housing Without Bidding from July 1st.
With a new resolution in effect from July 1st, 2025, social housing and accommodation for armed forces projects will be allocated to investors without a bidding process. This streamlined approach is part of a pilot program that tests special mechanisms and policies to accelerate the development of much-needed social housing.
The Surprising Interest Rates for Social Housing Loans for the Under-35s
The State Bank offers an exclusive loan package for individuals under 35 years of age, interested in purchasing social housing. This incredible offer boasts an attractive interest rate of just 6.1% per annum, fixed for the first five years. It’s a fantastic opportunity for young individuals to get on the property ladder and secure their dream home.
“Housing Revolution: Bank Pledges $330 Million for 100 Social Housing Projects”
The commercial banks have pledged a credit package worth VND 7.8 trillion for 100 social housing projects. This significant financial commitment underlines their support for the development of much-needed social housing initiatives across the country.
