Mortgage Rate Hikes Spark Panic Among Homebuyers

Concerns Over Lending Rates Exceeding 10% Annually

After a period of low rates, deposit interest rates officially reversed in Q4/2025 as multiple banks collectively adjusted upwards. This increase in deposit rates has led to a corresponding rise in lending rates.

At many banks, home loan interest rates during the 1-3 year preferential period now range between 7-9% per year, approximately 0.5-1% higher than early 2025.

Mr. Nguyễn Quốc Hiệp, Chairman of GPInvest, stated that lending rates are the critical factor determining market absorption, and could even become the biggest risk if not managed appropriately.

According to Mr. Hiệp, in 2026, the supply of real estate will undoubtedly increase as numerous projects have completed legal procedures and are ready to launch. This is an inevitable development after a prolonged period of market stagnation due to land, investment, and construction issues. However, increased supply does not necessarily equate to a vibrant market if capital flows, particularly credit, remain constrained.

“Both homebuyers and developers heavily rely on bank loans. If interest rates rise significantly, capital costs will escalate rapidly, directly impacting selling prices and purchasing decisions,” Mr. Hiệp analyzed.

According to the Chairman of GPInvest, home loan interest rates are already showing signs of increasing. In just over a month, support rates for first-time homebuyers have risen by approximately 2% per year. With deposit rates trending upward and a common lending margin of 3-3.5%, home loan interest rates could easily surpass 10% per year.

“The 10% threshold is highly sensitive. Once rates exceed this level, most buyers will hesitate due to the substantial debt burden, especially for long-term loans. Even with ample supply, the market risks falling into a state of illiquidity,” Mr. Hiệp warned.

Not only homebuyers but also real estate companies face significant pressure from interest rates. Rising capital costs will drive up project expenses while narrowing sales potential. This creates a detrimental cycle, making it difficult for businesses to balance cash flows, particularly those with high financial leverage.

According to Mr. Hiệp, without reasonable credit policy adjustments, real estate could be the first sector to suffer when interest rates rise. Conversely, if the government implements flexible measures to control interest rates at reasonable levels, the market could achieve more sustainable recovery in 2026.

Avoiding Over-Reliance on Financial Leverage

In an interview with Tiền Phong, Mr. Nguyễn Quang Huy, an expert in Banking and Finance at Nguyễn Trãi University, analyzed that the potential rise in real estate lending rates should be viewed as part of a normal development cycle. As numerous critical infrastructure and urban projects—from highways, railways, aviation, seaports, metros to megacities—are completed and operational, the economy’s capital demand will inevitably increase. In this context, interest rates serve as a resource allocation tool, directing funds toward sectors and projects with real value creation potential.

According to Mr. Huy, the key difference from previous cycles is that the market is better prepared. Buyers, investors, and the banking system no longer expect prolonged low-interest periods but consider current rates as the new baseline for calculations. As a result, rising rates are not shocking but become a parameter in financial planning.

“The 2026 real estate market will no longer be driven by expectations of cheap money but by actual utility, infrastructure, and financial discipline. In this context, affordable housing, social housing, mid-range commercial properties, industrial real estate, and rental apartments for professionals will be crucial pillars,” Mr. Huy noted.

He advised homebuyers to view current interest rates as a long-term operating baseline rather than a temporary fluctuation. Buyers should prioritize segments linked to real demand and existing or developing infrastructure. Importantly, individuals must manage finances rigorously, avoiding excessive reliance on leverage.

Additionally, Mr. Nguyễn Quốc Hiệp, Chairman of GPInvest, emphasized that real estate companies should prioritize financial safety, minimize over-dependence on bank loans, and carefully plan investment and sales timelines. For individual investors, selecting suitable products, balancing cash flows, and managing debt capacity are critical survival factors.

“No one can predict market movements with 100% accuracy, but effectively managing interest rate risks and financial leverage will enable both businesses and homebuyers to remain resilient in the upcoming period,” Mr. Hiệp stressed.