After a prolonged period of rate hikes, several banks in Vietnam have started reducing mortgage interest rates, signalling a potential easing trend in the housing finance market.
Cash transactions at a bank branch (Illustrative photo: Tien Tuan).
State-owned lender Vietcombank has cut its average lending rate after five consecutive months of increases. The bank's average home loan rate currently stands at 7.4 per cent a year, down 0.1 percentage points from 7.5 per cent in June.
The reduction follows a steady climb from 6.4 per cent in February to 7.5 per cent in June, before easing slightly to 7.4 per cent in July.
At the same time, Vietcombank has launched a VND 20 trillion (approximately USD 769 million) lending programme for homebuyers purchasing properties that have already obtained land-use and home ownership certificates. The programme offers loan terms of up to 35 years and financing of up to 100 per cent of a property's value.
Other lenders have also begun relaxing credit conditions.
VIB now allows individual customers to lock in interest rates for up to five years on property purchases, refinancing, reimbursement loans and home construction or renovation projects. Homebuyers can also access interest support packages that reduce borrowing costs by an additional 0.2-0.4 percentage points annually throughout the loan period, depending on programme conditions.
Meanwhile, TPBank is offering incentives for property and secured consumer loans. Depending on the product and eligibility requirements, the bank may reduce interest margins by as much as 1.2 percentage points compared with standard rates.
Despite these moves, overall lending costs remain elevated.
According to market data, the average lending rate across Vietnam's banking sector remains around 11 per cent a year.
Figures from property consultancy DKRA Consulting show that fixed-rate home loans with terms of 12 to 24 months average 10.9 per cent annually across 11 major commercial banks.
Some lenders continue to charge significantly higher rates. VPBank offers a 13.2 per cent rate for 12-month fixed-rate loans, while VIB charges 11.1 per cent for 12-month loans and 12 per cent for 24-month loans. Fixed-rate mortgage products at MSB and ACB also remain above 11 per cent a year.
Only a handful of lenders continue to maintain fixed 12-month mortgage rates below 10 per cent, including HDBank at 9.8 per cent, VietBank at 9.5 per cent and Woori Bank at 9.3 per cent.