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|New social housing buildings in District 2, HCM City.-VNA/VNS Photo Văn Khánh|
VBSP adjusts interest rates on a yearly basis to best reflect socio-economic circumstances, but the rate will never exceed 50 per cent the average interest rate offered by commercial banks at the moment.
The new interest rate is even lower than the 5 per cent interest rate (or not exceeding 6 per cent in subsequent years) applied in the VNĐ30 trillion (US$1.32 billion) housing stimulus package aimed primarily at social policy beneficiaries and people facing financial difficulties. When the package was totally disbursed and ended last year, many were concerned that low-income people might again struggle to save enough money for homes, since commercial banks’ rates are out of their reach.
The minimum repayment term is 15 years after the first loan is disbursed. If customers want to borrow a loan with a shorter term, they can negotiate with lending bank.
Last June, the government implemented a 4.8 per cent interest rate for social housing loans. However, it’s reportedly not easy to access the credit, since the VBSP required that the borrowers deposit their monthly savings at the bank with minimum term of 12 months, starting from the date of signing the credit contract.
According to the government’s Decree 100/2015/NĐ-CP, the following groups are eligible to loans with preferential interest rates: people with merits to the revolution, low-income people, urban poor or near-poor households, workers working in enterprises both out of and in an industrial zone, military officers, workers under the employment of units under People’s Army and People’s Public Security, cadres and civil servants.