Hoang, a communications specialist, recently borrowed VND1.4 billion ($56,470) from a state lender to buy a VND4 billion apartment in HCMC.
The loan carries a fixed interest rate of 7.5% for the first three years. Home mortgages typically have a fixed rate for a certain number of months before changing to a variable rate.
“Compared to the 12 to 14 percent rate on some of my friends’ old loans, I find the current level of interest rates much more manageable,” Hoang says. “Luckily, when I found the apartment, I also had some savings, so I decided to borrow from the bank to buy it.”
In the first quarter of 2024, many banks offered long-term home loans with interest rates of only 5-6% for the first 6-36 months.
Some bankers say this is “the lowest level in over a decade”.
Foreign banks currently offer the lowest interest rates on the market, typically 6% or less, for up to three years.
Nguyen Thanh Hai, regional manager of the HCMC branch of South Korean bank Shinhan Bank Vietnam, says his bank’s fixed interest rates for mortgage loans are around 5.5 to 6 percent per year, or close to half of the rate of 9 to 10% in force in the second half of 2023. .
Borrowers can opt for 5.5% for the first six months or 6% over three years, he adds.
At state-owned Agribank, Vietcombank, VietinBank and BIDV, fixed interest rates on mortgage loans are 5-7%, slightly higher than those offered by foreign lenders.
Private lenders such as BVBank, SHB and ACB charge 5-8%, but for shorter periods than foreign banks.
Fixed mortgage rates
| Bank | Fixed mortgage rate (%) | Period |
| Shinhan Bank | 5.5-6 | 6-36 months |
| Woori Bank | 5.1-5.7 | 12-36 months |
| BIDV | 5-5.5 | 6-12 months |
| Vietcombank | 6.3-7.5 | 6-36 months |
| Agribank | 6.5 | 24 months |
| BVBank | 5-7.5 | 5-12 months |
| PBR | 7.3-8 | 3-12 months |
*A variable rate is applied after the fixed period.
Floating interest rates are also falling by 2 to 3 percentage points at some banks.
Private lenders charge high rates, above 12%, while public lenders charge between 9 and 10%.
Floating Mortgage Rates
| Bank | Variable mortgage rate (%) |
| Shinhan Bank | 8.5 |
| Woori Bank | 8.7 |
| Vietcombank | 9 |
| BVBank | 9.5 |
| VIB | 9-10 |
| TPBank | 11.6-12.1 |
| HD Bank | 12-12.5 |
*Floating rate = Base rate + fluctuation depending on the banks.
Experts believe that when floating rates are applied to current loans and those in the near future, they will be lower.
The loan interest cuts come at a time when banks are racing to attract new borrowers and spur credit growth.
As of early March, outstanding loans were down 0.72% from last December, indicating that capital is not flowing into the economy, according to the State Bank of Vietnam.
The deputy general manager of a state-owned bank says that despite interest rates on deposits falling to historic lows, people continue to park their money in banks.
This poses a problem for banks because they now have ample liquidity but no one to lend it to, the executive says.
They add that most banks are shifting their focus from business lending to consumer lending and cutting interest rates across the board.
Shinhan Bank’s Hai notes that the real estate sector is receiving special attention from the government as it is directly linked to the public’s housing needs.
The government and relevant agencies are seeking measures to support both property developers and consumers.
Reducing loan rates can do this by reducing costs for developers and making it easier to buy a home, he says.
“This is a great opportunity for people who want to borrow money to buy a home.”
