Interest rate on housing loans under VND30 trillion ($1.43 billion) housing support package will stay at 5 per cent.
The State Bank of Vietnam (SBV) has issued Decision No.2788, replacing Decision No.21, on interest rates in 2015 for housing loans within the housing support package, in which interest rates remain unchanged.
The VND30 trillion ($1.43 billion) housing support package was launched in January 2013 with loans bearing an interest rate of 6 per cent per annum, with the package aimed at removing difficulties in the construction and real estate industries. More than a year of implementation, however, loan disbursement was low. A report from the Ministry of Construction said that as at October 15, 2014, the central bank had disbursed just VND3.58 trillion ($170.46 million), or 12 per cent of funds in the package. This prompted the government to loosen lending conditions.
Since August 21, 2014, households and individuals have been able to access loans with 15-year terms instead of ten-year terms. The potential applicant pool was also expanded. Low-income earning individuals facing difficulties in taking out commercial loans for housing (including house and land) will be able to access loans if the purchase does not exceed VND1.05 billion ($49,120). Urban dwellers with land but not the financial capacity to build, renovate or repair the house can also access loans.
The SBV has also indicated that more commercial banks will become involved in the package.