Post-promotional mortgage rates in Vietnam have climbed to 13–15% per year, up roughly 3–4 percentage points from the same period in 2025, according to a Q2 survey by the Vietnam Real Estate Market Research and Assessment Institute (VARS-IRE). The surge is hitting an already stretched housing market where prices remain stubbornly elevated, and market absorption has dropped to its lowest levels in recent memory.
Promotional Rates Mask a Steeper Reality
Banks are advertising headline mortgage rates of 8.5–11% per year, but these teaser rates apply for just six to twelve months. After that window closes, most loans convert to floating rates calculated as a base or reference rate plus a margin of roughly 3.3–3.5 percentage points. The result, as documented by VARS-IRE, is that borrowers are actually servicing debt at 13–15% annually — a figure that exceeds the psychological threshold at which most Vietnamese buyers are willing to take on a mortgage.
Among state-owned lenders, Agribank offers the lowest promotional rate at 8.2%, while Vietcombank stands at 9.8%, VietinBank at 10.5%, and BIDV at 10.8% for fixed twelve-month packages. Private banks are not far behind: Techcombank starts at 9.2%, ACB at 9.5%, and VIB near 11%. The convergence between state and private lenders is notable, suggesting systemwide funding pressure rather than competition from any single bank.
How Fast Rates Have Risen
The shift over the past year is striking. In 2025, state-owned banks rolled out mortgage packages with promotional rates as low as 5.5–6.7% for the first twelve to twenty-four months. Current promotional floors of 8.2–10.8% represent increases of 2–5 percentage points in the space of roughly a year. Research firm Dat Xanh Services records a similar pattern, noting that floating-rate loans in the first half of this year have reached as high as 16% — nearly 4 percentage points above the 8–11% range that characterized the 2024 lending environment.
Why Funding Costs Are Climbing
VIS Rating, Vietnam's domestic credit rating agency, attributes the uptick primarily to banks' own cost of funds. After an extended period of keeping deposit rates low to support post-pandemic economic recovery, lenders have raised savings rates to attract retail deposits, and that cost is being passed through to mortgage borrowers. A secondary constraint is regulatory: the State Bank of Vietnam has maintained a policy of controlling credit flows into real estate, which limits banks' ability or willingness to price mortgages more aggressively even when demand exists. The combination of higher deposit costs and a constrained supply of real-estate credit has created a floor under lending rates that market competition alone cannot easily erode.
Absorption Collapses as Buyers Step Back
The rate environment is doing visible damage to transaction volumes. Dat Xanh Services data show that when prevailing mortgage rates were in the 9–11% range during 2025, absorption of new supply ran at roughly 45–50%. Once rates climbed into the 12–14% band in the first half of this year, absorption fell to 20–30%. If the 13–15% level persists through the second half, Dat Xanh Services projects absorption could drop below 20%.
A PropertyGuru consumer sentiment report reinforces the behavioral math: more than 80% of Vietnamese homebuyers and investors say they will only borrow when rates are below 9% per year, with the ideal range cited as 5–9%. The vast majority indicate they would stop using leverage altogether above 11%. Current market rates sit comfortably — and uncomfortably for sellers — above that ceiling.
Sticky Prices Close the Affordability Gap
The squeeze is compounded by the fact that property prices have not adjusted downward to compensate for higher financing costs. The gap between average home prices and household income continues to widen, leaving buyers with fewer options. Many are responding by reducing their loan-to-value ratios, extending the time they save before purchasing, or waiting for developer-subsidized rate programs that offset some of the floating-rate exposure. Buyers are also gravitating toward projects that offer early cash-flow generation — rental-yielding units or properties with developer buyback guarantees — as a hedge against the cost of debt.
Investor Takeaway
For investors monitoring Vietnam's property and banking sectors, the current rate environment creates a bifurcated picture. Residential transaction volumes are likely to remain under pressure through year-end unless the State Bank signals a pivot toward looser real-estate credit policy or deposit rates ease materially. Developers with strong balance sheets and the capacity to subsidize buyer financing will hold a significant competitive advantage over leveraged peers. For banks, mortgage growth targets set earlier in the year may prove difficult to meet without accepting thinner spreads — a dynamic worth watching in upcoming mid-year earnings releases.
