SHOULD I LOAN TO BUY A HOUSE NOW?

Home loan interest rates are falling below 10%/year. Experts advise that people can borrow to buy a house to live in and should not borrow for investment purposes now.

According to Tien Phongs survey, in September, home loan interest rates at many banks were below 10%/year.

Specifically, among the Big 4 group, BIDV has the lowest preferential interest rate at 7.8%/year and Vietcombank has the highest preferential interest rate at 9.5%/year. VietinBank and Agribank have preferential interest rates of 8.2% and 8%/year, respectively.

The interest rates of other commercial banks do not have much difference, fluctuating mainly in the range of 8 - 9%/year. For example, TPBank (8%/year), HDBank (8.2%/year), VIB (8.5%/year), Eximbank (8.5%/year).

Some other banks have loan interest rates of over 9%/year, such as SeABank (9.29%/year), UOB (9.49%/year), and Sacombank (9.5%/year). ..

However, this interest rate is only applied for 3-6 months, the highest is 1 year. When the preferential period ends, most banks charge a floating interest rate, which is common at 12 - 13.5%.

Interest rates have continuously "cooled down" in recent years. This is concretized through 4 times reduction in operating interest rates of the State Bank. However, the lending interest rate stated by the State Bank will likely decrease further shortly.

Recently, batdongsan.coms report "Consumer psychology and real estate trends at the end of 2023" showed that up to 73% of people who want to buy a house in the next year plan to borrow capital. Which, about 44% of investors expect interest rates below 8%; 33% expect interest rates in the 8-10% range.

According to Mr. Pham Anh Khoi - a member of the Vietnam Real Estate Association (VARS) Market Research Working Group, the interest rate chart is the deciding factor in whether or not cash flow returns to the real estate market.

“When the lending interest rate is around 8-9%, then the real estate market will react positively. Because this is the threshold that investors can tolerate when borrowing," said Khoi.

However, Mr. Nguyen Duc Toan - General Director of EZ Real Estate Company - said that the current low lending interest rates are only suitable for real home buyers and investors should not borrow to buy.

Toan said that home buyers should not borrow more than 50% of the value of the apartment. Currently, the preferential interest rate to buy a house is only for the first 1-2 years and then floats according to the market.

"At this time, apartment and real estate prices are high. With apartments, there are no houses under 2 billion VND. To buy a 2-bedroom, fully furnished apartment is over 3 billion VND. The customer himself is no one. If you have all the money to buy a house right away, you have to mobilize from relatives and borrow from the bank. With current house prices, buyers borrow at least 1 billion VND. Currently, the interest rate is about 8%/year, with one month of loan interest repayment. and the original is more than 15 million dong/month. This amount, many families also have to spend, "said Mr. Toan.

Mr. Toan added that the current housing supply is scarce, so it is difficult for people to choose to buy a house. Currently, transactions on the market are mainly apartments that have been put into use and are bought and sold between people.

"This time is like the real estate market 10 years ago. At that time, the market was in short supply, so a low-priced project only sold out within a day. I remember 10 years ago, I sold an apartment project Commercial on Ho Tung Mau Street (Bac Tu Liem, Hanoi) priced at 15-17 million VND/m2. In just one day, the entire building is sold. Currently, if there is an apartment project priced under 30 million VND/m2, I guarantee all within 1 day," Mr. Toan said.

Mr. Toan shared that banks want to lend to real home buyers because bad debt for this type of customer is almost zero and to promote credit growth. Mr. Toan also advised people not to borrow from banks to invest in real estate at this time because of liquidity and waiting for prices to increase.

Associate Professor, Dr. Dinh Trong Thinh - Senior Lecturer at the Academy of Finance - said that borrowing to buy a house is also a motivation to repay debt and spend economically.

However, buyers must balance their finances and loan interest rates. They should not if they have to borrow too much money and have high interest rates.

In particular, couples with low incomes should not "force themselves" to borrow from banks to buy a house or pay off debt.