Improving Financial Health, Young People Prefer to Buy Homes on Installments
At the age of 32, while some of his colleagues are still living at home and renting, and not yet thinking about starting a family, Mr. Nguyen Duc Thai (Gia Lam, Hanoi) already owns a luxurious apartment in a modern urban area along with a happy home.
“Based on the experience of my parents, who have been saving for 20 – 30 years and still couldn’t afford to buy a house because the price of houses has been increasing rapidly, I learned a valuable lesson that the cheapest time to buy a house is the earliest possible time,” Mr. Thai concluded.
Not wanting to follow in the footsteps of the previous generation and fearing the burden of debt and living with 2 – 3 generations in a cramped space, Mr. Thai decided to use his savings after 5 years of work and take out a mortgage to buy a house and have his own place to live in since he was only 28 years old. With the current progress and income, Mr. Thai plans to fully repay the loan to the bank in 3 years – 3 years earlier than the initial plan.
“When you don’t have a house, the only goal is to own a house. But when you already have a house, life becomes more stable and secure, and you also have the opportunity and motivation to set bigger goals for yourself,” Mr. Thai shared.
People like Mr. Thai are becoming more and more common. According to a survey by the real estate technology group PropertyGuru, the group of young customers, from 22 to under 39 years old, is becoming the main group with the demand for home ownership, replacing the middle-aged group over 40 years old as before.
Specifically, the group aged 22-34 looking to buy a house has increased significantly from 39% in 2021 to over 42% in 2023. This trend shows that the financial health of young people is improving. When they have saved enough, they will take advantage of financial leverage, borrow and buy on installments to own a place to live, as a solid foundation for their career development.
While it is an excellent option, experts recommend that when buying a house on installments, buyers need to consider many factors. First, they need to assess their income and monthly installment costs to ensure their own and their family’s quality of life. In addition, a comprehensive evaluation of the potential risks that may arise during the payment process will help buyers anticipate the risk of being passive, especially when the floating interest rate starts to be applied. In particular, buyers should research and choose reputable developers to avoid legal and handover progress risks.
“We should only trust large developers who have the capacity to implement projects on schedule and comply with legal standards, as well as have the financial capability to support long-term customers. Avoid cases where we still have to pay regularly to the bank, but still have to rent because the project is not implemented as planned,” said Lawyer Nguyen Thanh Tuan, Ho Chi Minh City Bar Association, evaluated.
Safe and Attractive Installment Policy from Top Leading Developers
Understanding the customers’ concerns, in early 2024, Vinhomes, the most reputable real estate brand in the market, launched a 15-year installment program called “Buy a luxury home – Be financially secure”, applied to the products of Vinhomes Ocean Park 2 townhouses, The Zenpark – Vinhomes Ocean Park 1 apartment (Hanoi) and The Beverly – Vinhomes Grand Park apartment (Ho Chi Minh City).
The reason this policy caused a big splash in the market is that Vinhomes, as the developer, committed to guarantee a fixed interest rate of only 6 – 7% per year for the first period. After 2 years, the actual interest rate will be applied according to the market but in the most beneficial way for customers, with a maximum interest rate of only 8% per year for low-rise products and 9.5% per year for high-rise products.
If the actual interest rate of the bank is lower, the buyer will enjoy the actual interest rate applied by the bank. If the actual interest rate of the bank is higher, the buyer is still guaranteed to only pay interest at a maximum cap of 8% or 9.5% per year. The entire difference in interest rate (if any) will be paid by Vinhomes to the bank.
Mr. Minh Tuan (30 years old, Hanoi) shared that thanks to his early work, he has accumulated a sum of money and plans to consider buying a house for his small family. According to calculations, if he uses the entire budget to pay in full, he can only aim for affordable apartments or small projects located very far from the city center, unable to have access to high-quality products.
After much consideration, Mr. Tuan and his wife chose the option to borrow 70% over a period of 10 years to own a 1-bedroom apartment at Vinhomes Ocean Park 1 urban area.
The “Buy a luxury home – Be financially secure” sales policy is an opportunity for young people to own a home without worrying about floating interest rates and be financially secure
“According to the developer’s policy, by paying an upfront amount of about 760 million, I can receive the house and move in immediately. The remaining accumulated money will be used for my family’s emergency fund as well as part of the capital for my wife and me to expand our business. The profit obtained from that, along with not having to pay rent every month, allows us to comfortably make installment payments to the bank, even after the principal repayment grace period,” Mr. Tuan shared.
According to experts, Vinhomes’ breakthrough policy is the perfect solution for many people to own a home, as it reduces initial cost pressure and avoids long-term financial risks. Moreover, this policy is also seen as a support to help homebuyers have the opportunity to own a quality and upscale living space, instead of accepting the “getting what you pay for” situation.
With a wealth of experience from hundreds of thousands of homes sold along with preferential policies, it is not difficult to understand why the Vinhomes brand is considered a “safety lock” and a “golden choice” for settling down and starting a career in the best living urban areas.
