Social housing buyers aged up to 35 years are now eligible to borrow at 5.9% interest under a government program to help young people acquire homes.
The rate, which is 2% less than the average of that of the four state-owned lenders, Agribank, BIDV, Vietcombank, and VietinBank, will apply for the first five years of the mortgage, according to the State Bank of Vietnam.
Starting in 2026, the rate will be 1% lower than the average.
The government has also announced a lower interest rate of 6.4% for developers of social and workers’ housing and renovation of old apartment buildings.
Giang Huynh, deputy director of market research, HCMC, at property consultancy Savills, said the 25-35 age group requires a certain level of financial support on top of their savings to buy a house.
They are willing to use financial leverage to achieve homeownership but are also more cautious in their borrowing decisions.
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A social housing complex in Hai Phong City, northern VIetnam. Photo by VnExpress/Le Tan |
The subsidized loans are offered under a VND120 trillion (US$4.57 billion) package earmarked in April 2023 for social housing development.
The interest rates have been cut four times since they began at 8.2% for buyers and 8.7% for developers.
Around VND3.4 trillion has been disbursed from the package so far, 86% of to developers of 21 projects and the rest to buyers.
The Ministry of Construction said the low disbursement rate was because the supply of social housing has been limited and many do not meet the conditions for getting loans.
The interest rates are still quite high and the short loan tenors are not attractive enough, it admitted.
Prime Minister Pham Minh Chinh earlier this year ordered the central bank and other lenders to provide incentives to homebuyers under 35 years of age as the property market is seeing most affordable housing options disappear amid a glut of mid- and high-priced products.
