Vietnam offers low-income workers cheap mortgages

By Nguyen Hoai   June 7, 2016 | 02:52 pm GMT+7

Low-income workers in Vietnam who want to buy a house this year will be given access to bank loans with an annual interest rate of just 4.8 percent.

The decision, which will take effect later this year, has been approved by Prime Minister Nguyen Xuan Phuc and included in Decree 100 about the development and management of social housing.

People with low incomes will be able to take out bank loans with annual interest of 4.8 percent a year. The loans will be provided by the Vietnam Bank for Social Polices.

The decree also states that buyers can borrow up to 80 percent of the property's value. Should they wish to repair or renovate their property, the bank will lend them up to 70 percent of the costs providing they do not exceed 70 percent of mortgaged assets.

Loans will be issued on a 15-year term, but if customers are after a shorter duration, they can talk to the bank.

Buyers will not be permitted to mortgage or sell their houses within the first five years of the loan period.

In 2013, the Vietnamese government released a loan package worth VND30 trillion ($1.34 billion) to help people buy houses with a low annual interest rate of five percent.