Interest rate for loans to support house purchases in 2019 maintained at 5pct p.a.

03-Jan-2019 Intellasia | Zing News | 6:00 AM Print This Post

Compared to the interest rate for loans to support house purchases applied in 2018, interest rate in 2019 will continue to be maintained at five percent per annum (p.a.), less than half the interest rate of normal commercial loan packages.

The State Bank of Vietnam (SBV) has issued Decision No. 2570 regulating the interest rates applied for commercial banks in 2019 with outstanding loans for housing support as prescribed.

Accordingly, from 2019, the interest rates of commercial banks applied to these outstanding loans will be five percent p.a. Compared to that in 2018, the interest rate for house purchase loans continued to be maintained by SBV.

According to the regulations of SBV, types of houses allowed to participate in the housing support loan package will be social or commercial houses with area of less than 70 square meters (m2) and selling price of less than 15 million dong/m2 according to regulations of the Ministry of Construction.

For individual customers, in order to enjoy this interest rate, there must be a contract for buying, renting, or finance leasing of social housing, or a contract for renting, or buying commercial houses with the investors of project of a small apartments with area of less than 70 m2, and selling price of less than 15 million dong/m2.

In addition, individuals must also submit application for loans to buy, rent, or finance lease social housing, rent or buy commercial houses; and commit that other family members have not received such loans from banks to serve the same purpose.

With these housing support loans, periodically in December every year, SBV will determine and re-announce the applicable interest rate for the following year. However, this interest rate is always equal to half of the average lending interest rate of banks in the market and does not exceed five percent p.a.

The participating banks offer these housing support packages include Vietnam Bank for Agriculture and Rural Development (Agribank), Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), Vietnam Joint Stock Commercial Bank for Industries and Trade (Vietinbank), Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), etc.

Meanwhile, the actual statistics show that current interest rates for individual housing loans have increased by 1-1.5 percent p.a. compared to the beginning of the year.

Currently, most banks offer home loan packages with tenors from six months to 20 years. In particular, the maximum lending ratio is usually about 70-80 percent of the value of the house.

Survey at the group of State-owned commercial banks (i.e. Vietinbank, Vietcombank and BIDV), currently the preferential interest rate for home loans is applicable in the first few years, then the interest rate will be calculate from the floating interest rate of 24-month savings rate plus the margin. The average interest rate for housing loans is about 10.5-11 percent p.a. for this group.

Meanwhile, the group of private joint stock commercial banks including big banks like Military Joint Stock Commercial Bank (MBBank), Saigon Thuong Tin Joint Stock Commercial Bank (Sacombank), Saigon Joint Stock Commercial Bank (SCB), etc. have interest for home loans of about 11-12 percent p.a.

According to SBV, the credit balance of real estate loans of banks is now at 7-8 percent of total outstanding loans to the economy. This rate has decreased significantly compared to the level of approximately 30 percent in the period 2010-2011. However, this does not include loans for home purchase and repairs that are being accounted for in consumer lending of banks. If the balance is included, real estate credit may still account for nearly 20 percent of total outstanding loans of the economy.


Category: Finance, Vietnam

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