Subsidized Loans Offer Hope for Young Homebuyers

The State Bank of Vietnam has announced a significant reduction in interest rates for homebuyers under the age of 35. The new rate is set at 2% below the average of the four major state-owned lenders for the first five years of the mortgage, with a further reduction to 1% below the average starting in 2026.

Support for Social and Workers' Housing

In addition to aiding young homebuyers, the government has introduced a lower interest rate of 6.4% for developers focusing on social and workers' housing, as well as the renovation of old apartment buildings. This move aims to address the shortage of affordable housing options in the market.

A social housing complex in Hai Phong City, northern Vietnam. Photo by VnExpress/Le Tan

Financial Leverage and Cautious Borrowing

Giang Huynh, a market research deputy director at Savills, notes that the 25-35 age group is keen on using financial leverage to achieve homeownership but remains cautious in their borrowing decisions. This demographic requires additional financial support beyond their savings to purchase a home.

Challenges in Disbursement

Despite the VND120 trillion (US$4.57 billion) package earmarked for social housing development, only VND3.4 trillion has been disbursed so far. The Ministry of Construction cites limited supply of qualifying social housing and unattractive loan terms as major hurdles.

Prime Minister Pham Minh Chinh has urged the central bank and lenders to provide more incentives to young homebuyers, as the property market increasingly lacks affordable options.