Racing to Disburse Low-Interest Loans
Ms. Thu Nga from Dong Da, Hanoi, shared that she had recently secured a loan of VND 1.5 billion at a fixed interest rate of 6.5% per year for the first two years. “I opted for a two-year fixed rate to have peace of mind regarding my repayments. With this interest rate, which is only 1.5% higher than the deposit rate, I think it’s reasonable,” Ms. Nga said.
 Low-interest rates for real estate loans with new loans. Photo: Nhu Y. |
At the latest State Bank press conference, Deputy Governor Dao Minh Tu stated that lending rates are currently lower than they have been in the past 20 years. In reality, some commercial banks’ old loans with high-interest rates are still influenced by public opinion. Therefore, the State Bank has required banks to publicly disclose their average lending rates so that people can choose to borrow from banks with lower rates.
According to a survey, real estate loan interest rates at banks are only 5-6% per year during the promotional period, slightly higher than the savings rate for 12-24-month terms. Some foreign banks even offer real estate loan packages with interest rates below 6% per year, fixed for two to three years.
Even the Big 4 banks, including BIDV, Vietinbank, Vietcombank, and Agribank, offer real estate loan interest rates ranging from 5.5% to 7% per year during the promotional period. After the promotion ends, the banks apply a floating rate mechanism.
In the joint-stock commercial bank bloc, VPBank has announced industrial real estate rental and purchase loans with interest rates starting at 0.6% per month. The bank accepts the rental or purchase contract for industrial real estate as collateral, with a loan limit of up to 70% of the contract value and a loan term of up to 20 years. Meanwhile, BVBank offers interest rates as low as 5% per year for loans to buy, build, or renovate houses. The post-promotion margin is 2% per year, and the floating rate is between 9.5% and 10% per year. Sacombank offers fixed rates of 6.5% per year for six months, 7% per year for 12 months, and 8% per year for 24 months for loans to buy, build, or renovate real estate. After the fixed-rate period, the interest rate will be adjusted quarterly…
A leader of the state-owned bank group believes that banks offer incredible incentives for industrial real estate and that lending rates have never been lower than they are now. “We have achieved good credit growth for real estate businesses. Credit to individual customers is also picking up compared to the end of 2023,” the leader added.
|
“Since the end of 2023, the State Bank has continuously directed commercial banks to cut costs and profits to lower lending rates, including new and old loans.” Dao Minh Tu, Deputy Governor of the State Bank. |
Injecting nearly VND 21,000 billion into real estate developers
In a recently published report, the Ministry of Construction cited data from the State Bank, stating that as of February 29, 2024, credit outstanding for real estate business activities reached nearly VND 1,114 trillion, an increase of over VND 20,700 billion compared to the end of 2023 (equivalent to a rise of 1.86%).
Of this, credit outstanding for urban area and housing development projects decreased from VND 305,650 billion at the end of 2023 to VND 303,572 billion. Credit outstanding for office projects decreased from VND 42,596 billion to VND 42,367 billion. In contrast, credit outstanding for industrial park and export processing zone construction projects increased from VND 77,033 billion to VND 78,349 billion. Credit outstanding for tourism, ecological, and resort projects decreased from VND 43,570 billion to VND 43,393 billion. Credit outstanding for restaurant and hotel projects increased from VND 59,581 billion to VND 60,502 billion.
Credit outstanding for construction, repair, and sale or lease of houses decreased from VND 123,353 billion to VND 121,274 billion. In contrast, credit outstanding for land-use rights purchases increased from VND 75,509 billion to VND 79,873 billion. Credit outstanding for other real estate business investments increased from VND 365,669 billion to VND 384,343 billion.
The credit growth rate for real estate business activities is much higher than the overall credit growth rate of the entire economy. According to the State Bank’s data, the scale of credit for the entire economy as of the end of February reached VND 13,467,585 billion, a decrease of 0.75% compared to the end of 2023, equivalent to a contraction of nearly VND 101,393 billion.
According to the Ministry of Construction, since the beginning of 2023, to resolutely implement the Government’s and Prime Minister’s directions on prioritizing support for growth in association with macroeconomic stability and inflation control, the State Bank of Vietnam has deployed synchronous solutions to create favorable conditions for credit institutions in providing credit and facilitating people and businesses in accessing credit, thereby enhancing capital absorption for the economy in general and the real estate sector in particular.
Ngoc Mai
