Comparing home loan interest rates in Cambodia during COVID-19

• 15 July 2020
• Local News
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Interest rates are one of the most critical factors when deciding which bank to choose for a housing loan or mortgage. Amid the COVID-19 pandemic, some banks in Cambodia have reduced their interest rates with the aim of boosting more economic transactions. Thus, for those who are looking for a home loan at the moment might see some advantage in seeking the most competitive interest rate.

Below is a list of interest rates and some basic terms and conditions for housing loans from some banks with competitive rates as of June 2020* (alphabetically arranged):

BRED Bank
-Loan size: Up to 70%
-Interest Rate:
1st year: 6.66%
2nd year onward: 7.77% for 15-year borrowers
2nd year onward: 7.88% for 20-year borrowers
-Minimum years of loan: 5 years (with penalty fee for clearing loan before minimum period)

Cambodian Public Bank
-Loan size: Up to 80%
-Interest Rate:
1st year: 6.99%
2nd year: 7.50%
3rd year onward 7.99%
-Minimum years of loan: 3 years (with penalty fee for clearing loan before minimum period)

CIMB Bank
-Loan size: Up to 70%
-Interest rate: 7.5% constantly
-Minimum years of loan: 3 years (with penalty fee of 3% for clearing loan before the minimum period)

Hong Leong Bank
-Loan size: Up to 70%
-Interest Rate:
For general borrowers: 7.99% constantly
For cooperated project borrowers:
Option 1: 6.99 % for 1st-3rd year, then 8.25% from 4th year onward
Option 2: 6.66 % for 1st year, and 7.99% from 2nd year onward
-Minimum years of loan: 5 years (with penalty fee of 3% for clearing loan before the minimum period)

J-Trust
-Loan size: Up to 70%
-For general borrowers starting from 7.95%
-For cooperated project borrowers:
1st year: 6.88%
2nd year onward: 7.88%
-Minimum years of loan: 5 years (with penalty fee of 3% for clearing loan before the minimum period)

KB Kookmin Bank
-Loan size: Up to 70%
-Interest rate:
1st year: 5.49%
2nd year onward: 7.5%
-Minimum years of loan: 3 years (with penalty fee of 3% for clearing loan before the minimum period)

MayBank
-Loan size: Up to 80%
-Interest rate:
1st year: 6.88%
2nd year onward: 7.88 for 25-year tenure
Minimum years of loan: 3 years (with penalty fee of 3% for clearing loan before the minimum period)

Shinhan
-Loan size: Up to 70%
-Interest Rate
1st year: 4.99%
2nd year onward: 7.45%
-Minimum years of loan: 3 years (with penalty fee of 3-4% for clearing loan before the minimum period)

UCB
-Loan size: Up to 70%
-Interest rate
1st year 7.5%
2nd year onward: 8%
-Minimum years of loan: 1 year (with penalty fee of 3% for clearing loan before the minimum period)

In conclusion, interest rates are very crucial. However, the interest rate should not be the only deciding factor, as there are many other factors that borrowers should also consider. Those factors include the size of the loan, the required criteria for requesting the loan, the minimum and the maximum years of the loan, the penalty fee when paying off before contracted period, the initial banking fee, the property evaluation fee, and the insurance and lawyer fees, among others.

Some banks might seem attractive with a lower interest rate, but with strict requirements. For example, an additional title is required as collateral. While some banks, though with a low-interest rate, require borrowers to take their loan over a more extended period with high penalty fees when paying off early. Meanwhile, some banks with high-interest rates might have flexible conditions. Therefore, one should consider all these factors, so you can make a decision based on your specific case.

*Disclaimer: These interest rates and criteria were collected in June 2020 for initial information only. They can vary based on the terms and conditions of each bank on a case by case analysis. For further details on your case, please contact each bank directly.

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