Early repayment of a home loan: how the penalty is calculated

Basis: Article 14 of Circular 39/2016/TT-NHNN (fees agreed between the two parties). The bank fee schedules are reference figures from a 2022 article, and each bank has changed them many times. Updated 24/10/2026.

With spare cash, many people want to repay part of, or settle, their home loan to lighten the interest. Before transferring money, compare the early-repayment fee with the interest you would save.

1. What the law says

Under Article 14 of Circular 39/2016/TT-NHNN, credit institutions and customers may agree on the fees related to lending, including the early-repayment fee when a customer repays early. The law sets no ceiling or common fee schedule. So the figure lies in the credit contract you sign, not in one document for all banks.

The common calculation: fee = fee rate × amount repaid early. An example from a Vietnam Banks Association advisory article: borrow 500 million, rate 3%, repay 100 million early, the fee is 3 million VND.

2. Fee levels banks have published (reference)

A Vietnam Banks Association summary dated 16/11/2022 cites some fee schedules; ask the bank again because they may have changed.

Bank	Medium and long-term loans (per the 2022 article)
Vietcombank	0.3–1% of the amount repaid early
Agribank	1.5% in year one, 1% in year two, 0.5% in year three; from year four set by the branch, at most the year-three level
Techcombank	3% for the first two years, 2% from year three (per the application date of 23/6/2014 given in the article)

General pattern: repaying early in the first few years is usually charged more, then the fee falls over time.

3. Break-even example: should you repay 500 million early?

Suppose you owe 1.5 billion VND, the current rate is 10% a year, and the early-repayment fee is 2%.

• Fee: 500 million × 2% = 10 million VND.
• Interest saved: 500 million × 10% = about 50 million VND a year, or about 4.2 million a month.
• Break-even: 10 million ÷ 4.2 million = about 2.4 months.

In this example, repaying early pays off if you would otherwise keep the loan for a few more months. If the fee is 5% (25 million), break-even is after about 6 months; it can still be worthwhile but should be compared with using the 500 million for another purpose. The calculation only holds if the rate stays the same; if a floating rate rises the benefit is larger, and if it falls the benefit is smaller.

4. Two ways to use the early repayment

1. Reduce the monthly payment while keeping the term: lighter cash flow, suitable if you worry about unstable income.
2. Shorten the term while keeping the payment: total interest falls more, suitable if income is stable.

Ask the bank which option you may choose and whether a contract addendum is needed.

5. What to do before repaying

1. Find the "early repayment" clause in the contract: the fee rate by year, the minimum amount per repayment, whether there is a maximum.
2. Ask how it is calculated for a partial repayment and for a full settlement.
3. Ask whether the promotional rate still applies after a partial repayment.
4. Ask about the notice period, usually in writing.
5. Get written confirmation of the outstanding balance and fee before transferring money.
6. Keep a reserve fund: do not use all your cash to repay the loan. See Managing your finances before buying a home.

6. When you want to sell a home that is mortgaged

Selling a home with a loan requires settling the loan and releasing the mortgage before or at the same time as the title transfer, so the early-repayment fee is part of the cost of selling. See also Costs when selling a home and Apartment title-transfer procedures and costs.

7. Some common situations

• You just received a bonus, sold a car or received an inheritance: repaying part is the easiest choice; ask the minimum per repayment so it is not refused.
• A floating rate is rising: reducing the balance early reduces the part of interest exposed to change; compare the fee with the interest saved as in section 3.
• You want to move to another bank with a lower rate: you must settle the old loan, so you bear the old bank's early-repayment fee, plus new appraisal and mortgage costs. Add up everything and compare with the interest saved over the remaining term.
• The contract does not state the fee clearly: ask the bank to provide in writing the fee schedule that applies to your contract before transferring money; if you need to complain, keep the contract and message exchanges.

Point to remember: the law lets the two sides agree on the fee, so your bargaining power is greatest at the time of signing the contract. Negotiate the fee and the fee-free period when you take the loan, rather than waiting until you want to repay.

• Vietnam Banks Association (VNBA) — Phí phạt trả nợ trước hạn được tính như thế nào (basis: Article 14 of Circular 39/2016/TT-NHNN, formula, fee schedules of some banks), published 16/11/2022, accessed 24/10/2026.