People living in Me Linh social housing area, Hanoi - Photo: NAM TRAN
Why 15 million VND? Will this level be adjusted? Will the interest rate for social housing loans be fixed or floating? What should borrowers calculate?
Tuoi Tre records readers' and experts' opinions on this story.
- Mr. LE HUU NGHI (Director of Le Thanh Construction - Trading Company Limited):
"Easier to breathe" than the old regulations
In general, current regulations on conditions for purchasing social housing are much more open and flexible than the old regulations.
The more open point of the income condition for purchasing social housing under the 2023 Housing Law compared to the old regulation is that if the social housing buyer is married, the income of the couple must not exceed 30 million VND/month. With this condition, the target group for purchasing social housing will be greatly expanded, especially young families.
However, income conditions for social housing buyers are currently stipulated in a decree issued by the Government.
When market prices fluctuate, adjustments must be made. I think relevant political organizations, social organizations, and associations need to pay attention and monitor the application of this regulation. If this condition is outdated, they should recommend the Government to make adjustments.
- Mr. NGUYEN QUOC KHANH (Vice President of Vietnam Real Estate Brokers Association):
Save 6.8 - 7.8 million VND/month to buy a house
If the interest rate is too low, banks will not be able to cope in the current context. Currently, the deposit interest rate of the banking system is from 4 - 5%/year, so it is very difficult for banks to lower the interest rate for social housing loans.
With an interest rate of 6.6%/year, if a household buys a 50m2 apartment, priced at about 1 billion VND, if they borrow 800 million VND, they will have to pay interest of about 52.8 million VND/year.
Total cost of interest and principal payment from 6.8 - 7.8 million VND/month, for a long period of 15 - 20 years is acceptable.
This payment level is less than 30% of the income of a household eligible to rent or buy social housing. Homebuyers can balance it if they really want to buy a house.
- Mr. NGUYEN QUOC HIEP (Chairman and General Director of Global Real Estate Investment Joint Stock Company):
Interest rate incentives need to be more substantial
The interest rate of 6.6%/year in the current context is an effort of banks but is still a huge burden for couples whose income does not exceed 30 million VND/month.
With this income level, if you borrow about 1 billion VND to buy a house, paying interest is a pressure.
To truly help low-income people in urban areas buy social housing, banks need to have their own support policies. Supporting interest rates for social housing loans at around 5%/year would be more reasonable to increase homebuyers' access to capital.
Whether the goal of building 1 million social housing units by 2030 can be achieved or not depends on many support policies from the Government, including credit policies. With high credit, home buyers still cannot borrow money to buy houses and no matter how much we reform procedures, we still cannot achieve the goal.
Although social housing project investors are currently exempted from land use fees, the incentive policy is not attractive enough for businesses investing in social housing projects. It can be seen that if the loan interest rate is about 8%/year, it is not much different from the loan for commercial housing, so it does not encourage businesses to participate.
- Dr. CAN VAN LUC (member of the National Monetary and Financial Policy Advisory Council):
Long-term capital, interest rate must be floating
The interest rate of 6.6%/year is not too attractive but is at an acceptable level.
It is important to understand that the 6.6%/year interest rate may be only at this time, and will be adjusted after a while according to the market interest rate. This interest rate is equivalent to 2/3 of the commercial interest rate on the market.
But it should be noted that this is a long-term loan, and after one year there may be adjustments according to the new interest rate level.
Home buyers always want lower interest rates, but banks still have to base it on the general level of loan interest rates in the market.
- Dr. NGUYEN TRI HIEU (finance and banking expert):
Reduce risk for borrowers
I think the current interest rate of 6.6%/year of the Social Policy Bank is very good. However, this must be a fixed interest rate for many years.
If this preferential interest rate is only for the first year and then floating, it is meaningless.
In developed countries like the US, commercial housing loan interest rates can be up to 7.5%/year but fixed for up to 30 years.
This is what home buyers want, they can arrange to pay interest and principal over a long period of time. If it is only fixed for a few years, it will create risks for home buyers.
- Mr. NGUYEN QUOC HUNG (Vice President and General Secretary of Vietnam Banking Association):
Low-income earners deserve preferential treatment.
The government has approved a loan interest rate of 6.6%/year, which means it has balanced many factors.
The nature of social housing policy supports the poor and low-income people, so it is necessary to view the policy from the perspective of long-term stability, with a maximum loan term of up to 25 years.
The policy of supporting interest rates for social housing loans needs to be based on the support capacity of the state budget.
For the 120,000 billion VND loan package, eight commercial banks have registered to participate in lending about 140,000 billion VND, they can balance the resources, the problem is who the borrowers are.
For home buyers, interest rates can be 3% lower than the average loan interest rate of four state-owned commercial banks because this is a group of low-income workers who deserve to be given favorable conditions.
Social housing area for workers under construction in Thanh My Loi ward, Thu Duc city, Ho Chi Minh City Photo: TU TRUNG
Deputy Minister of Construction BUI XUAN DUNG:
Many incentives, more interest rate reduction coming soon
The only condition for renting or buying social housing is income. You just need to be a Vietnamese citizen who is eligible to buy a house.
Investors of social housing projects are exempted from land use fees and land rent for the entire project area, and enjoy a maximum profit rate of 10%.
Investors of social housing projects are also given incentives to use up to 2% of the total project land area or 2% of the total project construction floor area for commercial services and commercial housing.
Regarding interest rates for loans to buy social housing, the State Bank has implemented a credit package program of about VND 120,000 billion for investors and buyers of social housing and workers' housing to borrow at interest rates about 1.5 - 2% lower than the average medium and long-term lending interest rates of four state-owned commercial banks in the market during the periods.
Currently, the State Bank is consulting with relevant ministries, departments and branches before submitting to the Government a resolution to adjust the content of the VND120,000 billion program in the direction of reducing lending interest rates for social housing tenants and buyers, a reduction of 3-5% compared to the average commercial lending interest rate of four state banks.
The Ministry of Construction has issued a document agreeing with the State Bank's proposal to facilitate borrowers' access to preferential capital sources.
At the Government meeting in July 2024, the Prime Minister agreed with the State Bank's proposal and requested to promptly complete and submit for approval a resolution adjusting the content of the preferential loan program of VND 120,000 billion.
The Ministry of Construction proposed that the State Bank direct and encourage more commercial banks to participate in the VND120,000 billion program and loosen credit, creating conditions for banks to carry out research procedures and consider increasing the loan term for purchasing social housing.
Why does social housing loan interest rate increase by 1.8%/year?
In a recent dispatch (August 1) sent to branches of social policy banks in provinces and cities, the Vietnam Bank for Social Policies instructed that the interest rate for loans to buy social housing (NƠXH) from August 1 will increase to 6.6%/year instead of 4.8%/year.
Explaining this change, the Vietnam Bank for Social Policies said that Decree No. 100/2024 detailing a number of articles of the Housing Law on the development and management of social housing will take effect from August 1, replacing Decree No. 100/2015 and Decree 49/2021.
Decree 100 stipulates that for loans with credit contracts signed with social policy banks to buy, hire-purchase social housing, build new houses or renovate and repair houses for residence before August 1, the lending interest rate will be applied equal to the lending rate for poor households as prescribed by the Prime Minister in each period.
Therefore, according to the Vietnam Bank for Social Policies, for loans with credit contracts signed before August 1, 2024, the social policy bank (the lender) and the borrower must agree in the credit contract appendix.
Specifically, "the lending interest rate is equal to the lending interest rate for poor households as prescribed by the Prime Minister in each period. Currently, the lending interest rate is 6.6%/year. The overdue interest rate is equal to 130% of the lending interest rate", the Vietnam Bank for Social Policies emphasized in the official dispatch and further instructed that when there is a change in lending interest rate or overdue interest rate, the social policy bank is responsible for sending a notice to the borrower no later than the first day of the next interest calculation period.
Talking to Tuoi Tre about the basis for applying the interest rate for loans to buy, hire-purchase social housing, build or renovate, repair houses for living at 6.6%/year, an increase of 1.8%/year compared to the previous regulations, the leader of the Vietnam Bank for Social Policies said that this is the same loan rate as for poor households.
Loans for buying a house, renting social housing, building or repairing a house for living are consumer loans with a term of up to 25 years, so this interest rate is reasonable.
On the other hand, according to this leader, the loan capital provided by the social policy bank is partly borrowed from the market and then re-lent to policy beneficiaries. If the lending interest rate is too low, the budget will have to compensate, and the budget is in difficulty and must also support other policy beneficiaries. For example, this social housing loan package, the loan capital is not enough to meet the borrowing needs of policy beneficiaries.
Three channels for loans to buy social housing
Currently, social housing buyers can access preferential loans through three channels:
First, borrow from the social policy bank with preferential interest rates equal to the interest rates applied to poor borrowers in each period. The outstanding loan balance of this channel as of the end of April 2024 is 16,903 billion VND, for more than 44,000 borrowers. The interest rate before August 1 is 4.8%/year, after August 1 is 6.6%/year, the State Bank compensates the difference in interest rates.
Second, borrowing from the VND120,000 billion credit package (now increased to VND140,000 billion) with interest rates 1.5 - 2% lower than commercial interest rates of four state-owned commercial banks. By the end of June 2024, VND1,344 billion had been disbursed.
Third, housing loan programs for policy beneficiaries, as of the end of April 2024, had outstanding loans of VND 4,823 billion, lending to 219,000 customers.
The preferential credit package is already 140,000 billion VND.
In a recent report sent to the Prime Minister on the implementation of social housing loans, the State Bank said that so far eight banks have participated in the preferential credit package for social housing development.
Of which, four state-owned commercial banks, Agribank, Vietcombank, VietinBank, BIDV, committed to lending 120,000 billion VND, four joint-stock commercial banks, VPBank, Techcombank, MBBank, Tienphongbank, also registered to participate in the preferential credit package, each bank committed to spend about 5,000 billion VND for preferential loans. Thus, the scale of the preferential credit package of 120,000 billion VND for social housing development has increased to 140,000 billion VND.
The State Bank said it has worked with eight banks and agreed to increase the preferential loan term of the 120,000 billion credit package to 10 years.
The preferential loan interest rate in the first 5 years is 3% lower than the average medium and long-term loan interest rate of four state-owned commercial banks. In the next 5 years, the preferential loan interest rate for buying social housing will be 1-2% lower.
Source: https://tuoitre.vn/vay-mua-nha-o-xa-hoi-dieu-kien-da-mo-20240810232452113.htm
Comment (0)