As the property market has yet to recover and real estate sales by banks are still facing challenges, local lenders have continued to launch preferential home credit programs but with certain conditions.
Orient Commercial Bank has expanded a home loan program with rates from 13.5% per annum, or a three-percentage-point reduction. However, individual borrowers must have stable income of no less than VND12 million a month while business households must have operated for at least two years.
The bank offers the longest term of 15 years for this credit program and the maximum disbursement for a client is VND1.5 billion.
HDBank, meanwhile, offers the lowest rate for home loans at 8.6% per annum in the first three months. There is VND1 trillion worth of home credits available at this bank.
Eximbank on Thursday also announced a VND5 trillion credit program for customers having demands to buy or repair homes. Eximbank will fix the lending rate at 12% per annum in the first two years and after that, lending rate will be deposit rate of 13 months plus 2.5 percentage points. Loans amount up to 70% of guarantee asset value.
Large banks such as Vietcombank, VietinBank and BIDV have expanded home credit programs since June with rates hovering around 12% per year in the first three to six months. After that, these lenders will negotiate with borrowers to figure out new rates.
In fact, banks apply low lending rates for home loans only at the start of the term and customers then have to pay interest rates following rates on the market. Attractive rates of 8-10% per year actually are just a way to lure customers.
Therefore, the lending rate calculation formula after the preferential period should be read carefully.
For example, Eximbank applies a rate of 12% in the first two years but after that, the lending rate will be a deposit rate of 13 months plus 2.5 percentage points. If the deposit rate in the third year is 12%, customers will be subject to a rate of 14.5% per annum.
