Managing your finances before buying a home: reserve fund and debt-to-income ratio

Example figures are illustrative assumptions; replace them with your household's numbers. The 20–40% range comes from a Batdongsan.com.vn survey cited in Vietnam Financial Times (27/07/2026). Updated 24/10/2026.

Buying a home is a large expense that lasts many years. Before you view properties, work out four numbers: a comfortable borrowing level, your own capital, a reserve fund and how much you can bear if rates rise.

1. Debt-to-income ratio

This ratio is your total monthly debt repayments (home, car, cards, consumer loans) divided by your household's take-home income. A Batdongsan.com.vn representative said home buyers want the mortgage payment, principal and interest, to be about 20–40% of income. Banks may have their own thresholds; the ratio you can bear also depends on your fixed spending and the number of dependants.

The rule used in this article (an editorial suggestion, not a regulation): keep total debt repayments at about 30% of income at the current rate, and below about 40% once 2 points of interest are added.

2. Example: household income of 50 million VND a month

Step	Figure
Maximum repayment at 30% of income	15 million/month
Matching loan (20 years, 10% rate, equal principal-and-interest payments)	about 1.55 billion
Payment if the rate rises to 12%	about 17.1 million/month (about 34% of income)
Payment if the rate rises to 14%	about 19.3 million/month (about 39% of income)

For a 1 billion VND loan over 20 years with equal principal-and-interest payments: at 10% about 9.65 million a month; at 12% about 11.0 million; at 14% about 12.4 million. This gives the figures in the table for a 1.55 billion loan. If you already have another debt of 5 million a month, the home repayment must fall accordingly, and borrowing capacity drops to about 1.0 billion at 10%. See the formula in How to calculate home loan interest.

3. Own capital and costs on top of the price

Own capital = home price − loan, plus costs on top of the price: taxes, fees, notary fees, loan fees, furnishing, and maintenance and management fees in the first months. For a 2.5 billion home with a 1.55 billion loan, you need about 0.95 billion of own capital, not counting the extra costs. See Costs on top of the apartment price and Taxes and fees when buying or selling property. This capital should come from savings, not from another loan, because stacking loans raises the debt ratio.

4. Reserve fund

A reserve fund is money set aside for the unexpected (job loss, illness, home repairs), separate from the home purchase capital. The editors suggest this calculation: monthly essential spending plus the home loan repayment, multiplied by the number of months you want to cover, usually 3 to 6.

For example, essential spending of 25 million plus a 15 million repayment is 40 million a month; 6 months is 240 million VND. If you buy to rent out, add a few months of vacancy. A similar calculation appears in Safe bank-loan leverage.

5. Test the bad scenarios

Run three scenarios and see whether the payment stays under the threshold:

1. Rates rise: add 2 points, then 4 points after the promotional period. Many banks fix the rate for only 12–36 months and then float it.
2. Income falls: by 20–30% for 6 months.
3. Extra costs: home repairs, maintenance, children, relatives.

If any scenario exceeds about 40% of income, reduce the loan, extend the term sensibly or choose a lower-priced home.

6. Checklist

1. List your take-home income and all existing debts.
2. Calculate borrowing capacity at 3 rates (current, +2 points, +4 points).
3. Set the maximum budget, including own capital and extra costs.
4. Set aside the reserve fund before paying a deposit.
5. Ask the bank for a month-by-month repayment schedule; see Home loans for projects: rate after the promotion.
6. Review whenever rates or income change; if you have spare cash, consider early repayment.

7. Buying to live in versus buying to rent out

When you buy to live in, the home produces no income, so the whole repayment must come from household income. When you buy to rent out, rent can help with the repayment but is not certain: there are vacant months, rent cuts and repair costs. So when calculating the debt-to-income ratio, first compare the repayment with salary income and treat rent as an extra that may not materialise. See also Calculating cash flow when buying a home and Minimum own capital to buy an investment apartment.

This article only explains how to calculate; it is not personal financial advice for you. Consider your family's circumstances and ask an expert when needed.

• Vietnam Financial Times — Lãi suất vay mua nhà "neo" hai con số, kỳ vọng hạ nhiệt không dễ (desired repayment of 20–40% of income, fixed-rate period of 12–36 months, rate after the promotion), 27/07/2026.