In a significant move to strengthen Vietnam’s social welfare policies and boost affordable housing access, the government has mandated a fixed preferential lending interest rate of 5.4% per annum for social housing loans. This fixed rate takes effect on October 10, 2025, under the new Decree No. 261/2025/ND-CP.
The rate, implemented by the Vietnam Bank for Social Policies (VBSP), applies to loans used to purchase, lease-purchase, build, renovate, or repair social housing.
This new regulation marks a critical change from the previous system, which tied social housing loan interest to the variable rate applicable to poor households. The shift to a fixed 5.4% provides several advantages:
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Financial Stability: By establishing a predictable, low-cost rate, the government offers long-term financial certainty to low- and middle-income borrowers, insulating them from potential market fluctuations.
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Affordability Enhancement: The 5.4% rate remains highly competitive, solidifying the policy’s commitment to making homeownership attainable for target beneficiaries.
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Streamlined Administration: The Decree standardizes the rate, simplifying lending processes across the VBSP system. Importantly, the new 5.4% rate will also be applied to the outstanding principal balance for existing credit contracts signed prior to the effective date, ensuring all current social housing borrowers benefit immediately from the favorable adjustment.
For clarity, the overdue debt interest rate will be calculated at 130% of the preferential lending interest rate. This clear mechanism reinforces the regulatory framework for sustainable lending within the social housing sector.
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