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The Saigon Times

Saigon Times Group is a leading Vietnamese media organization with prestigious business and consumer publications. After three decades of development, we have built a good reputation through our publications on economy, business and markets for Vietnamese and foreign readers.

Basic

Free

  • Free access to daily domestic news, podcasts and videos

Premium

$5 $1 /month
(VND 23,900)
Monthly Annual

  • Unlimited access to domestic news, podcasts, videos and magazine articles on current social / economic / trade / investment issues, commodity / financial/securities markets, M&A activity, FDI, local and foreign business communities and more.

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  • Your payment method will then be automatically charged ₫ 899.000 every 365 days thereafter.
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28.9 C
Ho Chi Minh City
Tuesday, July 15, 2025

High interest rate makes social home loans unattractive

By Thai Huy

Must read

HCMC – The high interest rate discourages eligible individuals from taking out loans to buy social homes, according to a recent survey of HCMC residents.

Four major State-owned commercial banks – Agribank, BIDV, Vietcombank and VietinBank – have been entrusted by the central bank SBV to make soft loans available for social housing developers and buyers. However, eligible residents have shown little interest in those loans as the interest rate is 8.2% a year.

Earlier, the Government has approved a credit program worth VND120,000 billion for developing at least one million homes for the poor and workers in 2021-2030. The credit line is also meant for the renovation and construction of aging apartment buildings, available for borrowers from the beginning of April, according to the Vietnam News Agency.

The credit package is unattractive to average income earners in HCMC as the 8.2% interest rate is preventively high for them.

The interest rate for homebuyers is 1.5-2 percentage points lower than that for mid and long-term commercial loans but may change every six months depending on commercial loan rate movements. Therefore, homebuyers may face risks if commercial loan rates edge up. Moreover, the duration in which buyers of social homes enjoy such an interest rate is five years maximum.

According to the HCMC Real Estate Association (HoREA), lender banks and homebuyers would have to negotiate a new interest rate after the five-year period and this is the main reason for residents’ reluctance to borrow.

HoREA proposed the Ministry of Construction study a preferential credit package offering social home buyers an interest rate of 4.8-5% per year with a maximum term of 25 years.

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