Homebuyers wait for interest rate cuts

Deposit interest rates decreased rapidly, but interest rates on old loans, especially home loans, of individual customers are still waiting to be reduced.

On May 29, many homebuyers said they were waiting for the bank (NH) to lower the lending interest rate after many months of "burdening" the interest rate to 13%-15%/year. Meanwhile, Deputy Governor of the State Bank (SBV) Pham Thanh Ha affirmed that there will continue to be solutions to encourage credit institutions to reduce costs to reduce lending interest rates.

Still bearing profit up to 14.55%/year

Before the news that the State Bank of Vietnam continuously reduced the operating interest rate in a short time and commercial banks simultaneously lowered the deposit and lending rates, Ms. Linh (living in Thu Duc City, Ho Chi Minh City) contacted the bank where she borrowed to buy a house. I just found out that her loan is still bearing the interest rate of 14.55%/year, has not been adjusted down since March 2023 until now.

With a loan balance of nearly 700 million dong, she spends nearly all of her salary every month to pay principal and interest to the bank, greatly affecting the family's spending. "In the beginning, my home loan had a preferential interest rate of only about 7.5%-8%/year, so it was quite easy to breathe. Now the loan interest rate has doubled, so my family is under great pressure. I just hope that the bank will soon reduce the interest rate for old loans so that my family will be less burdened," said Ms. Han.

Borrowers to buy apartments are still bearing very high interest rates. Photo: PHAM DINH

Similarly, Mr. Nguyen Ba (living in Binh Thanh District, Ho Chi Minh City) said he has a home loan at a state-owned commercial bank with an interest rate of 13%/year. With a credit balance of more than 1.6 billion dong, every month just for interest, Mr. Ba has to pay more than 11 million dong.

"Seeing banks announce to reduce deposit interest rates, reduce lending rates, but my home loan has not been reduced. If the interest rate is about 10%-11%/year like last year, it will be much less stressful. much," said Ba.

As noted by a reporter of Nguoi Lao Dong Newspaper, by the afternoon of May 29, many individual customers who borrowed to buy a house had not yet received notice of interest rate adjustment with old loans. Meanwhile, commercial banks are still racing to launch preferential credit packages with low interest rates for customers who borrow to buy houses and cars with interest rates from only 7.99%/year in the first 6 months or other low interest rates. around 10%/year for customers to choose from. However, the demand for new loans is very low in the context of a quiet real estate market and economic difficulties.

The general director of a state-owned commercial bank analyzed that the demand for home loans of individual customers is very low, the bank has launched a preferential credit package for new home loans, but the disbursement progress is quite slow. Meanwhile, with old loans, customers are disbursed at a time when interest rates are high, so a certain delay is required.

Dr. Nguyen Quoc Anh, University of Economics Ho Chi Minh City, analyzed that the loan interest rate adjustment will depend on the provisions in the credit contract of the customer and the bank, usually 3 months, 6 months or 1 year. there is an adjustment period. At the present time, there is room to reduce lending interest rates for state-owned commercial banks, while it will be more difficult for joint-stock commercial banks because the cost of raising capital of this group is quite high.

"In order to reduce interest rates on old loans, including home loan rates, commercial banks must "digest" all deposits with high interest rates above 10% from the end of 2022 until now. Therefore, it is necessary to have a delay to absorb this high-interest rate mobilized input. In order for the interest rate reduction policy to be spread to the right audience, it is possible to have a segregated policy to support reducing loan interest rates for customers who borrow to buy an apartment, borrow to buy the first house," said Dr. Nguyen Quoc Anh.

Similarly, financial expert, Assoc. Prof. Dr. Nguyen Van Trinh also said that in order to reduce lending interest rates, we must wait for the banking system to absorb all deposits when the input interest rate is high. To do so, it will take a few more months for the loan interest rate to decrease faster. It is difficult to ask banks to quickly reduce interest rates at the moment because of the market mechanism.

At the SBV's meeting with commercial banks last week, many commercial banks pledged to reduce lending rates by 0.3 - 0.5 percentage points for all existing customers, effective from May 29. . However, many customers think that the maximum reduction of 0.5 percentage points is not much compared to the previous strong increase.

Encourage banks to reduce loan interest

According to statistics of the State Bank, the average new deposit interest rate of commercial banks is about 6.1%/year, down 0.37 percentage points compared to the end of last year. The average new lending interest rate in VND of commercial banks is about 9.07%/year, down 0.9 percentage points compared to the end of last year. However, individual customers who borrow to buy a home are still waiting for more interest rate reductions because with the current popular lending interest rate of 12%-14%/year in the context of economic difficulties, it still puts great financial pressure on investors. borrower.

Mr. Nguyen Hung, General Director of Tien Phong Commercial Joint Stock Bank (TPBank), acknowledged that deposit interest rates from credit institutions and commercial banks have been at a high level recently. With this move of the State Bank to reduce operating interest rates for the third time, interest rates will decrease and the cost of capital will also decrease in the near future.

"Commercial banks have tried to save capital and maximum costs to have the opportunity to reduce interest rates, but the largest part of the loan interest rate component is the cost of capital. If capital costs can be reduced, new banks have the opportunity to loans interest rates have been significantly reduced. Customers can easily access capital when the loan interest rates are lower," said Mr. Nguyen Hung.

Assessing the recent downward adjustment of operating interest rates, Deputy Governor of the State Bank Pham Thanh Ha said that the management agency has taken many synchronous measures to strive to reduce lending rates in order to remove difficulties. for businesses and residents. Currently, credit institutions have been taking measures to reduce lending interest rates to support businesses and people to restore production and business.

In the coming time, the SBV will continue to closely monitor domestic and international monetary developments, forecast inflation and market interest rates to adjust interest rates in line with the macro balance, inflation and policy objectives. The State Bank will continue to take measures to encourage credit institutions to reduce costs to reduce lending interest rates," said Deputy Governor Pham Thanh Ha.

Lower interest rates vary from bank to bank

The director of individual banking at a foreign bank in Vietnam said that the trend of reducing interest rates on home loans and consumer loans in the coming time will continue, but there are differences between banks. Specifically, the reduction depends on the conditions of each place, especially not only on the capital cost structure but also on the management capacity in reducing other costs of each bank, which may even have to be reduced. target profit for the whole year. "It is expected that from now until the end of the year, when banks can convert all of their high-priced deposits before into ones with lower interest rates, lending rates in general and home loans will drop." faster," said the director of this foreign bank in Vietnam.