Banks hike mortgage interest rates

In mid-June Vietcombank hiked its from 9.2 percent to 9.8 percent for the first three years.

At least three other banks have increased its rates.

United Overseas Bank has raised its rate from 6.49 percent to 7.69 percent.

Vietnam International Bank has adjusted its rate up by 0.2 percentage points since last month to 8.7 percent.

Bank managements said the pressure of rising deposit interest rates and tightened credit has forced them to hike loan interest rates.

Trinh Bang Vu, head of retail lending at Shinhan Bank, said since there is little room left for lending this year and the State Bank of Vietnam has not increased quotas, banks have to be selective in their loans.

Some lenders like Orient Commercial Bank have not yet increased their mortgage rates, but expect to do so by 0.1-0.2 percentage points in the next few months.

SSI Securities analysts expect home loan interests to continue to rise even if new credit growth quotas are announced.

KB Securities analysts forecast a 0.4-0.7 percentage point increase in rates this year due to inflation.