China
Floating rate
The rate a loan pays after the promotional period: the bank's base rate plus a margin. When the base rate changes, the monthly payment changes too.
How it works in Vietnam
In Vietnam, most home loans float once the promotional period is over. The bank reviews its base rate from time to time, while the margin is written into the loan contract, so nobody knows the later payments in advance.
The calculator applies the floating rate you enter to the rest of the term. The “Show what happens if rates rise” option shows what the monthly payment becomes if the rate goes higher than that.
Related terms
- Promotional rate
A lower interest rate, fixed for the first months of a home loan. When the promotional period ends, the loan moves to a floating rate.
- Base rate
A reference rate each bank sets and publishes for itself. A loan's floating rate is this base rate plus a margin.
- Margin
The fixed part added to the base rate to make the floating rate. The margin is written into the loan contract.
- Declining balance
A repayment method: the same principal every month plus interest on what is still owed, so the first payment is the highest and each later one smaller.
- Annuity / equal installments
A repayment method in which every monthly payment is the same amount, principal and interest together, as long as the rate stays the same.
Learn more
- Promo rate to floating rate in Vietnam: what you pay after
When the promotion ends, the bank resets your payment at the floating rate. A worked example on a 2 billion VND loan over 20 years, and what to ask first.