Concerns over rising variable interest rates and tough borrowing terms have dampened demand for mortgages among individuals and investors, even as interest rates are at record lows.
Interest rates on mortgages and property loans are currently at their lowest in several years, at 5-6% per annum at some banks.
Of Vietnam's four largest state-owned commercial banks, BIDV offers mortgage packages starting at 5 percent annual interest for terms up to 30 years, with a ceiling amount covering 100 percent of the needed capital.
Vietcombank has allocated $2.08 billion for personal and consumer loans for home purchases, home renovations and car purchases, with preferential interest rates starting from 4.9 percent per annum in the first six months for loans less than 24 months and 5 percent per annum in the first 12 months for loans longer than 24 months.
Agribank offers a fixed interest rate of 6.5% per annum for the first 12 months on a minimum three-year mortgage. For five-year loans, the interest rate is fixed for 24 months at 7% per annum.
VietinBank offers short-term mortgage interest rates starting from 5.2% per annum, and medium- to long-term loan interest rates starting from 5.8% per annum.
Among commercial banks, SHB offers preferential interest rates starting from 5.79% per annum on home loans, with loan tenures up to 25 years and maximum loan amount of 90% of the property value.
BVBank's interest rates start at 4.9 percent APR, with a 6-month fixed rate of 7.49 percent APR, and are fixed for the first 18 months on loans over 24 months.
Sacombank has set aside $416.67 million in concessional loans for customers needing to buy, build or renovate property, as well as purchase cars, with interest rates starting from 6.5 percent per annum.
PVcomBank is offering interest rates of 3.99 percent APR for the first three months, 5.99 percent APR for six months, and 6.2 percent APR for 12 months.
Techcombank offers 5% interest for the first three months, 6% interest for the first six months, 6.3% interest for the first 12 months, and 6.8% interest for the first 18 months.
HDBank offers an annual interest rate of 5 percent for the first six months, 6.5 percent for the first 12 months, and about 8 percent for the first 24 months.
However, under Circular 22, which will come into effect in early July, commercial banks will only be permitted to lend to individuals for the purchase of homes that are completed and ready for delivery, so-called “usable homes.”
Regarding this regulation, financial experts believe that this notice will create difficulties in the real estate market and limit individuals' access to bank loans.
In addition, concerns about rising mortgage interest rates after the preferential period ends are making an increasing number of people hesitant to take out mortgages at this time.
“Although mortgage interest rates have gone down, this is only a preferential interest rate that is applied for a certain period of time depending on the loan conditions. After the preferential period, interest rates will be higher as they will be based on the base rate method or a variable rate based on the 12-13 month deposit rate plus a margin of usually 2-3.6 percent per annum,” said Dinh Minh Tuan, director of Batdongsan.com Vietnam for the Southern Region.
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