Experts advise caution on mortgage leverage amid rising interest rates

Economic experts are advising caution regarding financial leverage for home purchases in Vietnam due to rising interest rates. Dr. Bui Ngoc Son noted that an increase in interest rates from 10% to 16% on a 3 billion VND loan could raise monthly interest costs from 25 million VND to 40 million VND, creating significant pressure for long-term borrowers.

To maintain financial safety, Dr. Chau Dinh Linh from the Ho Chi Minh City University of Banking suggests that monthly principal and interest repayments should not exceed 50% of total income, or 55% for those with a higher risk appetite. Additionally, Cao Thi Thanh Huong from Savills TP. HCM recommends that young buyers aim for stable installments of approximately one-third of their income to avoid financial exhaustion.