Unlike China, Cambodia has generally higher interest rates for home loans. So if you want to take out a loan on a house in Cambodia, you need to adapt to this.
The interest rate of home loans in Cambodia is three times of China’s rate.
According to the statistics of 100 cities released by the “BEIKE RESEARCH INSTITUTE”, in the current Chinese market, the mainstream interest rate for the first home is 4.09% on average, and the average rate for the second home is 4.91%.
In terms of LPR (Loan Prime Rate), the latest LPR pricing benchmark for 2023 announced by the central bank is: 1-year LPR3.65%, over 5-year LPR4.3%.
Before and after the Chinese new year, many cities released policies to reduce home loan interest rates, and the interest rates for first homes in most cities have fallen below 4%.
In Shenyang city, starting from February 1, the first-home loan interest rate of some banks will be reduced to 3.9%.
In Tianjin city, starting from January, the lower limit of the interest rate of commercial personal home loans for the first set of housing shall be "not lower than the corresponding period LPR-40 basis points", which is 3.9%.
In Zhengzhou, Henan and Taiyuan, Shanxi, some banks also began to carry out the lower limit of 3.8% for the first-home loan interest rate in early January.In Fuzhou and Xiamen, the lower limit of the first-home loan interest rate has also been lowered from 4.1% to 3.8% since January 31.
As the highest home loan interest rate in China, the four super-first-tier cities in Beijing, Shanghai, Guangzhou and Shenzhen have not yet made adjustments. Among them, Beijing ranks first with a first-home loan interest rate of 4.85%, followed by Shanghai at 4.65%, Guangzhou at 4.3% and Shenzhen at 4.6%.
In terms of provident fund loans, the interest rate of the first personal housing provident fund loan in China is 2.6% for less than 5 years (including 5 years), and 3.1% for more than 5 years; the interest rate of the second personal housing provident fund loans for less than 5 years (including 5 years) is from 3.025%, for more than 5 years is from 3.575%.
From the perspective of the loan term of 10 years and above, the interest rate of a first-home loan in China is generally 3.1% to 4%.
In Cambodia, due to the structure of banks being different from that in China, most of them are Private banks, and the interest rate of home loans in Cambodia is generally between 8% and 12%.
However, the payment method in Cambodia is somewhat different from China. Most developers provide 10-20% interest-free installment payments for 12 months, 24 months or 36 months, some projects' payments will be paid proportionally in stages according to the construction progress of the house. It is different from the method in China where loan repayment starts as soon as the contract is signed.
Cambodia has high home loan interest rates, but fixed deposit interest rates are also high
Everything has two sides. Although the loan interest rate in Cambodia is three times of China, the fixed deposit interest rate in Cambodia is also high, which is three or four times of China.
Let's take a look at the comparison of fixed deposit interest rates between Cambodia's ABA bank and the People's Bank of China.
The one-year fixed deposit interest rate in Cambodia is 7.25%, and the one-year fixed deposit interest rate in China is 1.65%.
The three-year fixed deposit interest rate in Cambodia is 7.77%, and the three-year fixed deposit interest rate in China is 2.6%.
Landed residential transactions to increase by 80% in 2022, which will boost the demand for home loans.
According to a report released by the National Bank of Cambodia, the sale and purchase of landed residential properties (link houses and villas) have increased by 80% in 2022, and the demand for real estate from local buyers continues to grow, especially the medium-priced and affordable housing properties. At the same time, the Residential Property Price Index (RPPI) increased by 4.2% year-on-year, of which Phnom Penh City increased by 4%, and other provinces increased by 7%, which means the real estate sector is starting to recover.
In the past year, as local buyers' demand for real estate increased, it also led to the continuous and rapid growth of banks' real estate lending. In the loan portfolio of the entire banking system in 2022, the proportion of construction and real estate has increased from 27% to 32% in 2022. Among them, housing loans accounted for 14%, real estate activities accounted for 9%, and construction accounted for 9%.
For Chinese people who intend to invest in Cambodian real estate, or Chinese people who are working and doing business in Cambodia, buying a house with a loan can learn about the latest home loan policies of the most major banks in Cambodia in advance.
In order to stimulate the active real estate market, many cities in China have lowered the interest rate of home loans to stimulate demand for housing purchases. Just in January, 15 cities lowered the interest rate of first-home loans. Most home Loans in Cambodia have unstable interest rates, and the leading party of interest rates is mainly banks. As the market demand for local buyers increases, real estate lending will also continue to increase. For those who need housing loans in the near future, you can learn about the interest rates of major banks in advance. At the same time, it is also important to choose a bank with a good reputation and a solid financial situation.
Key elements of loan policies of major banks in Cambodia:
1. Most banks generally support a loan amount of 70%-80% of the total property price(the remaining 20%-30%, depending on the developer’s policy, some developers will provide 1-3 years of interest-free installments, or a 10% down payment plus some interest-free installments.)
2. 15-25 years of the loan term
3. Foreigners need a recent 6 months income statement
4. The property right must be a hard title or soft title
5. Some banks will charge 1% of the loan amount as a processing fee
The latest loan policies of major banks in Cambodia in 2023
(1)Bank name: J Trust Royal Bank
- Loan amount: Maximum loan amount can up to 80% of the property valuation or $1.5M (which is lower than), Minimum loan amount from$21,000
- Loan term: 20 years
- Interest: 8.5% per year
- Loan approval fee: 1% of loan amount
- Early repayment fee: 3% for lump sum payment within lock-in period
(2) Bank name:Chip Mong Bank
- Loan amount: Maximum loan amount can up to 80% of the collateral value or $1 Million
- Loan term: 20 years
- Interest: 8%-8.50% per year
- Requirements
+Copy of national identification card/birth certificate/passport/family book/residential book
+Income statement
+Other documents required by the Bank
(3) Bank name: Shinhan Bank
- Loan amount: up to 80% of house value
- Loan term: 25 YEARS
- Interest
+USD: 1st year: 6.49%, 2nd year from 7.95%
- Requirements:
+ Must be an adult (age 18-60 years old)
+Have valid ID/ Passport
+Have a permanent address in Cambodia
+Have income with proof document
+Other terms and conditions will be applied
(4) Bank name: PPC Bank
- Loan amount: From USD 2,000, can loan up to 80% of the home value
- Loan term: 20 years
- Interest: 8.9%-13.5% per year
- Requirements:
+ Need to have a steady salary or sufficient income
+ Be a resident with an address
+ Demonstrate the ability to pay back
+ Hard/Soft Title Deed
(5)Bank name: CIMB Bank
- Loan amount: can loan up to 70% of the home value
- Loan term: 25 years
- Interest: According to customer loan situation
- Terms & Conditions
- Required Documents:
+Be a Cambodian citizen, for Individual and joint ownership
+Age 18 years-65
+Have Fire Insurance to protect your property
+ID Card
+Income evidence
+Other document required by the Bank
(6) Bank name: Prince Bank
- Loan amount: up to 70% of the collateral
- Loan term: can be up to 25 years
- Interest: 9%-12% per year
- Requirements:
+ 18 years old and above
+ Cambodian National ID or Passport
+ Patent Certificate or Employment Letter
+ Payslip during last 3 to 6 months or Income Statement
+ Soft/hard title as collateral
(7)Bank name: FTB Bank
- Loan amount: The minimum loan is 10,000 US dollars, and the maximum is determined according to the actual situation of the customer
- Loan term: up to 25 years
- Interest: 10%-12% per year
- Requirements:
+Identity documents of individual/signatory
+Family Book
+ Employment contract
+ Supporting documents subject to FTB’s requirement
(8) Bank name: BRED Bank - Loan amount: can loan up to 70% of the collateral - Loan term: up to 20 years - Interest: 8%-8.45% per year - Requirements: + ID Card + Family Book + Employment contract + Income statement + Other relevant documents required by the Bank
(9) Bank name: ACLEDA Bank
- Loan amount: up to US$ 300,000 but not more than 70% of the house price.
- Loan term: Maximum of loan period is 15 years
- Interest: 9%-10% per yea
- Requirements:
+ Customers who are currently employed by public organizations, national or international agencies, and will not exceed the retirement age.
+ Other customers who have good health and will not be over 60 years of age (start from receiving loan until the end of loan period).
+ Any Cambodian who is a majority
+ Having good history, reputation, attitude
+ Having a permanent address which is certified by local authority
(10) Bank name: DGB Bank
- Loan amount: Up to $300,000
- Loan term: Up to 300 months (25 years)
- Interest: 0.75% per month
- Requirements:
+ Age from18 years old
+ Personal documents: ID card, passport, family book, residence book (If have)
+ Occupational documents:
. Business: Copy of Certificate of registration, Patent certificate, Operating license, Financial Statements and other related documents (if any)
. Employment: Copy of Employment confirmation letter and/or ID card, salary payment slip issued in the last 3 months (if applicable)
- Soft title/hard title deed
(11) Bank name: LOLC (Cambodia)Plc.
- Loan amount: up to 100,000 for USD
- Loan term: 3-120 month(10 years)
- Interest: 1.2-1.5% per month
- Related Fee: Processing fee is charged 1% per cycle.
- Requirements
+ Must be aged from 18 to 55 years old
+ Permanent resident
+ Employment letter
+ Income statement
+ ID card and family book, resident book, birth certificate
Graphics context︱Nicole, Kangshin
Editor︱Sunnie Editor-in-Chief︱Nicole
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