Pressure on mortgage interest rates

However, many experts believe this pressure is not alarming, as banks also need to maintain stable lending rates to stimulate credit growth and help achieve the Government’s GDP growth targets.

Liquidity No Longer Abundant

Since the beginning of the year, the State Bank of Viet Nam (SBV) has injected net liquidity into the banking system, especially in July. As of July 25, outstanding OMO (open market operations) reached VND 210 trillion, marking the highest level since January 2017. In the week of August 4–8, the SBV issued VND 125.5 trillion, up 82.3% from the previous week, while simultaneously withdrawing about VND 118.1 trillion in matured repos. These actions increased outstanding repo balances to VND 216.5 trillion by the end of that week.

This shows that while interbank rates surged from 3.07% at the end of July to 6.25% in the week ending August 8, the central bank has continued its commitment to supporting liquidity for banks to expand credit.

Vietcap forecasts interbank rates may remain elevated in the short term, with the SBV likely to continue injecting liquidity to stabilize the system. Meanwhile, the exchange rate, which rose in July, is expected to ease. The likelihood of the U.S. Federal Reserve cutting rates in September rose to 93.1% as of August 7, from just 37.7% at the end of July, according to the FedWatch tool—providing more room for the SBV to cut domestic rates.

Nguyen The Minh, Head of Analysis at Yuanta Viet Nam, noted that systemwide credit had expanded nearly 10% by end-July, while banks had just received additional credit quota. As a result, capital demand will continue to rise, while system liquidity since early July has been much tighter than in the first half of 2025.

Recently, the market also learned that a major bank increased lending rates for individual customers with 24-month terms. Preliminary, unofficial information suggests this adjustment only applied to two preferential housing loan programs, not across the entire bank.

At the same time, executives of major commercial banks have called on the SBV to lower the deposit rate cap to reduce funding costs and better support businesses, or to increase the share of Treasury deposits counted as short-term funding, giving banks more credit resources for the economy. BIDV’s CEO, Le Ngoc Lam, also proposed raising the limit on electronic loans above the current VND 100 million to meet practical needs and reduce credit costs. These recommendations underscore that even leading banks are under liquidity pressure and are seeking policy adjustments to balance capital sources and sustain lending.

Efforts to Maintain Lending Rates

On the market, many commercial banks are offering attractive preferential housing loans, with fixed interest rates for terms of 3, 6, 12, 24, or 36 months ranging from just 6% to over 8% per year. Depending on the package, prepayment fees range from 1% to 4%, decreasing annually. Some foreign banks in Viet Nam, such as ShinhanBank and UOB, offer preferential fixed rates below 6% per year, though customers often face strict appraisal requirements, asset valuation conditions, and prepayment penalties.

In addition, the Government-directed housing loan package for young people under 35 has been embraced by dozens of banks, with rates starting from 5.5% per year.

However, experts warn that when the preferential period ends, lending rates could adjust sharply. Based on current base rates above 8% per year, plus margins, or tied to 12-month deposit rates at major banks plus 3–4% (depending on loan terms), post-preferential mortgage rates could exceed 9% per year. This raises borrowing costs, limits access to credit, and diminishes the stimulus effect of housing loan programs.

Even so, experts stress that the Government is determined to achieve GDP growth of 8.3–8.5%. In the remaining 100 days of 2025, credit growth will be a key lever. Housing loans, as the real estate market enters recovery, are central to this effort. If lending rates rise, it would run counter to the objective of boosting credit flows and supporting social housing.

Experts therefore recommend that preferential mortgage rates be prioritized at levels close to those for SME lending. To achieve this, a comprehensive program is needed to support capital balancing—beyond liquidity support—such as refinancing schemes to reduce commercial pressure on priority housing loans. Developers should also work with banks to design the most favorable mortgage programs for buyers of their projects.