Closing interest rate for social housing loans at 4.8%/year

The Prime Minister signed Decision 355/QD-TTg on preferential lending interest rates of the Vietnam Bank for Social Policies as prescribed in Decree No. 100/2015/ND-CP dated October 20, 2015 of the Government on development and management of social housing.

Specifically, the preferential interest rate of the Social Policy Bank applied to outstanding loans in 2019 as prescribed in Decree 100 is 4.8%/year. Overdue debt interest is calculated at 130% of the lending interest rate.

The social housing loan interest rate under Decree 100 applied in 2019 is 4.8%.

This Decision takes effect from April 1, 2019 and replaces Decision No. 370/QD-TTg dated April 3, 2018 of the Prime Minister.

According to the Decree, subjects eligible for preferential loans to buy, rent, or hire-purchase social housing; build new or renovate or repair houses for residence are subjects specified in Article 49 of the Housing Law.

The interest rate for social housing loans in 2019 is the same as in 2017 and 2018.

The above subjects are allowed to borrow for a minimum of 15 years from the date of first loan disbursement. In case the customer needs to borrow for a term lower than the minimum loan term, they can negotiate with the bank on a lower loan term.

According to Decree 100, buyers and renters of social housing will be able to borrow up to 80% of the value of the contract to buy, rent or hire-purchase social housing. In case of new construction or renovation or repair of housing, the maximum loan amount is 70% of the estimated value or loan plan and must not exceed 70% of the value of the property securing the loan.

Buyers and lessees of social housing are not allowed to mortgage or transfer the housing in any form for a minimum period of 5 years and are only allowed to resell or lease it after being granted a Certificate of land use rights, house ownership rights and other assets attached to the land.