What I learned from borrowing $60,000 to buy house in Hanoi alley

Whether to borrow money to buy a house or to wait and save up is a concern that many young families have.

At the end of 2020, I had a monthly income of about VND80 million and managed to save around VND2 billion.

Though house prices were much cheaper back then, they were still far beyond my financial capability.

However, instead of continuing to save and wait, I decided to take out a VND1.5 billion loan from the bank with a 10-year term to buy a 40-square-meter house priced at VND3.35 billion. It has four floors and is built in a 3.5-meter wide alley in Hanoi.

It has been over three years and the house has appreciated to VND5 billion while my debt has been mostly paid with only VND300 million remaining.

However, it was not all smooth sailing. Right after the purchase, the Covid-19 pandemic broke out.

Fortunately, I did not lose my job, but my salary was greatly reduced.

I had to limit spending and avoid travelling or vacation. Life became a bit rough, but my family and I all made our best efforts to keep our jobs and maintain our lifestyle.

Generally, buying a house with a loan will certainly come with pressure, but so far, my family and I have been living just fine after the decision to buy the house four years ago.

For people like me, the amount of debt should not exceed VND1.8-2 billion and around VND200 - 300 million should be set aside for emergencies.

With around VND4 billion, you can totally buy a house in inner-city districts like Ha Dong, Long Bien, Nam Tu Liem, and Bac Tu Liem with an area of about 30 square meters in small alleys under 2.5 meters wide.

I have been living in Hanoi for nearly 50 years and I have noticed that through market cycle, the prices of apartments and townhouses in inner-city districts or densely populated residential areas have never decreased.

In fact, the properties in these areas have increased as much as gold prices.

Meanwhile, price declines usually occur in suburban and rural areas, where prices were previously inflated by speculation.

With the housing supply being so limited in big cities like Hanoi and Ho Chi Minh City due to various legal hurdles, the prices of houses in the inner city will surely continue to rise.

Therefore, if anyone has the chance, they should borrow and close the deal early as waiting might just cost you the opportunity to become a homeowner.

What is everyone’s thought on this? Would you risk taking out a huge loan for a house?

Reader Van

*This opinion was translated into English by AI. Readers’ views are personal and do not necessarily match VnExpress’ viewpoints.