Hydraulic transformer is a significant component to develop the future energy saving hydraulic systems; however, the speed stability is one of the problems in such a machine because the rotor is unconstrained and the rotary inertia of the rotor is small. In this paper, aiming at the rotating speed of hydraulic transformer, a hydro-dynamic model of is proposed considering the nonlinear friction, oil compressibility and leakage. Both simulation and experiment are carried out to validate the hydro-dynamic model. Moreover, this paper theoretically analyzes the low-speed stability of hydraulic transformer based on the hydro-dynamic model for the first time. The mechanism of creep is discussed and the creep judgment method is presented. The influence of each parameter on creep is investigated, and the possible ways to avoid creep are explored. The calculations of the lowest stable rotating speed and the lowest stable flow rate without creep are given. This study is significant for the design and practical application of hydraulic transformer in the future.