Home loan interest rates at unprecedented lows

The home loan market has never been as exciting as it is today, when commercial banks simultaneously launched a series of preferential credit packages with a total value of tens of thousands of billions of VND, with record low interest rates from 3.88%/year.

Flooded with preferential loan packages

In early May 2025, posing as a person in need of a home loan, a reporter from Nguoi Lao Dong Newspaper approached a number of commercial banks to learn about preferential loan packages. At Viet Nam Thuong Tin Bank (VietBank), a consultant introduced the "0% interest loan - Everything goes smoothly" package with an interest rate of only 3.99%/year, a maximum loan term of 380 months and no principal repayment for the first 60 months. This bank also has a special program for customers buying apartments in affiliated projects, with interest waived for the first month and an interest rate of 8%/year for the next 11 months of the first year. After the preferential period, the interest rate will be adjusted periodically, depending on the loan term.

Vietnam Bank for Agriculture and Rural Development ( Agribank ) is also not far behind when implementing a preferential program until the end of 2025 for individual customers under 35 years old, who are civil servants, public employees or workers.

Customers can use the house they intend to buy as collateral, with a fixed interest rate of 5.5%/year for the first 3 years, a loan limit of up to 75% of capital needs and a maximum loan term of 40 years. In particular, customers are exempt from paying the principal for the first 60 months.

The recent high increase in real estate prices is a barrier preventing preferential loan packages from being effective. Photo: LAM GIANG

Many other banks such as ACB, BIDV, Vietcombank, VIB, VPBank, HDBank, MB, SHB , LPBank are also actively implementing preferential credit packages with interest rates from 3.88% or 3.99% in the first phase, or fixed interest rates of 5.5% in the first 2-3 years.

Notably, HDBank offers a social housing loan package with a term of up to 50 years, helping people with an income of less than 15 million VND/month own a house with installment payments of only 200,000 VND/day, supporting borrowers to balance their finances effectively.

Ms. Dinh Thi Thu Thao, Deputy Director of Personal Customer Division of Asia Commercial Bank (ACB), said that after only 2 months of implementing a preferential loan package for customers under 35 years old with interest rates from 5.5%/year, ACB has disbursed nearly 2,000 billion VND.

Ms. Hoai Nam (living in Binh Thanh District, Ho Chi Minh City), a person who is looking into borrowing money to buy real estate, was surprised because she rarely saw banks simultaneously launching many preferential loan packages to buy real estate with such competitive interest rates. Ms. Nam is considering buying an apartment in Ho Chi Minh City to rent out or invest in long-term land.

"I noticed that some banks extended the preferential interest rate period, loan term up to 30-50 years, even principal repayment grace period up to 5 years. These conditions are very attractive but I still haven't found a suitable real estate, partly because real estate prices have increased rapidly in a short time" - Ms. Nam shared.

Risks from floating interest rates

Although preferential loan packages bring many opportunities, some experts believe that borrowers still face risks from floating interest rates after the preferential period. Because, all loan packages have a term of interest rate after preferential period, calculated based on the 12-month mobilization interest rate plus a margin of 3.5% - 5% and will fluctuate from 11% - 13% / year. With home loans often lasting over 20 years, floating interest rates can cause great financial pressure if borrowers do not calculate carefully.

Ms. Dinh Thi Thu Thao said that large banks, with stable capital sources, often apply post-preferential interest rates based on 12- or 24-month savings interest rates plus a margin of 3% or more. Meanwhile, some smaller banks may apply floating interest rates or self-announced base interest rates, making the post-preferential interest rates significantly higher.

Dr. Nguyen Tri Hieu, a financial expert, warned that floating interest rates pose a big challenge to borrowers. After the preferential period, the debt repayment burden may increase sharply, especially for families with limited income.

Therefore, he advised homebuyers to ensure that the total debt repayment (principal and interest) does not exceed 50%-60% of monthly income to avoid risks. If this ratio reaches 70%-80%, borrowers will be under great pressure when floating interest rates increase suddenly. "Borrowers need to carefully study the terms, including the interest rate adjustment mechanism, early repayment fees and other costs to avoid falling into the interest rate 'trap'," Mr. Hieu emphasized.

Dr. Le Dat Chi, Ho Chi Minh City University of Economics, said that banks can transfer interest rate risks to borrowers when capital mobilization costs increase. To avoid this risk, he advised borrowers to choose large banks with stable input capital costs and transparent loan conditions to ensure that post-incentive interest rates are at a reasonable level. Comparing loan packages, understanding the post-incentive interest rate margins and related costs are key factors that borrowers need to carefully consider.

However, Ms. Dinh Thi Thu Thao assessed that the home loan market has improved a lot. Banks not only compete on interest rates but also bring added value such as legal advice, expanding loan conditions, adjusting flexible repayment times and building suitable payment schedules. "If the interest rate after the promotion is too high, customers can transfer the loan to another bank with better conditions" - Ms. Thao noted.

Credit growth is not as expected

In 2025, the banking industry aims for credit growth of about 16%, equivalent to VND 2.5 million billion pumped into the market. According to the State Bank, by mid-April 2025, credit growth of the entire system reached about 3.95% compared to the end of 2024. In Ho Chi Minh City alone, total outstanding real estate credit as of the end of February 2025 accounted for about 28% of total outstanding debt in the whole area, an increase of 1.15% compared to the end of last year. Of which, outstanding housing loans (including social housing, commercial housing...) increased by 0.67%.

However, although banks are actively promoting home loans, the growth rate is not as expected. Mr. Le Huu Nghia, Chairman of Le Thanh Construction Trading Company Limited, said that the main reason is the lack of supply. The demand for loans to buy real houses is very large, capital from banks is also abundant, but the number of new projects on the market is very limited. "The biggest problem is still the legal procedures for projects. Although there have been many efforts to remove them, the implementation from policy to practice still has many obstacles. In 2025, it will be difficult for many projects to complete procedures to open for sale, and it will be until 2026 that there will be new products. When there is a shortage of products, the demand for capital disbursement from banks will also be difficult to increase sharply" - Mr. Nghia analyzed.

Source: https://nld.com.vn/lai-suat-vay-mua-nha-thap-chua-tung-co-196250509220950946.htm