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Buying a home? Here are the housing loan options available for you

by iMoneyPublished: March 3, 2017Updated: March 3, 2017

Fulfilling your dream of owning a house is sometimes only a loan away. Here are some of the best home loan choices available right now.

Brief guide on best housing loan options available in the Philippines MyProperty iMoney

Every Filipino dreams of having a home they can call their own, but coming up with enough money to actually purchase a house and lot or a condominium is extremely difficult. Even if you already have enough in the bank for your dream house, it could be financially taxing to spend it all in one go.

Thankfully, there are many banks, government agencies, and lending institutions that offer housing loans at competitive rates. However, the market is teeming with options, and it can be overwhelming to sift through everything to find the perfect loan for you. We’ve done the research for you—here are the best loans in the market.

Pag-IBIG Fund Housing Loan

For most Filipinos, Pag-IBIG is the first thing that comes to mind when it comes to housing loans. In order to avail of a Pag-IBIG house loan, you have to be an active Pag-IBIG member aged 65 years old and below, with at least 24 monthly contributions, at least five of which should have been made in the last six months.

A Pag-IBIG member can borrow a maximum amount of Php6 million, an amount that will depend on their actual need and their capacity to pay. The amount can be repaid within a maximum duration of 30 years. The agency also offers affordable housing loans for homes that cost not more than Php750,000. For low- to mid-income Filipinos, this is a great way to purchase a starter home.

Pag-IBIG Fund recently lowered its interest rates by adopting a full risk-based pricing framework, making the institution more competitive with other institutional lenders. Pag-IBIG members who choose to take out a housing loan now enjoy interest rates as low as 5.5 percent for a one-year fixed pricing period, with the interest rates reaching a 10 percent ceiling under a 30-year period.

Bank Housing Loans

Unlike Pag-IBIG, you don’t need to be a member of any institution to avail of a home loan from a bank, although you might get certain privileges if you have an account with the bank you’re borrowing from. Most bank housing loans, however, require a minimum monthly family income of Php40,000 to Php50,000, as well as proof of a stable income source. Metrobank, for example, allows for a minimum monthly income of Php30,000, which is currently one of the lowest in the market.

Most banks offer minimum loan amounts of Php400,000 to Php500,000. PNB’s Sure Home Housing Loan can lend you a minimum of Php200,000 to finance a lot located outside Metro Manila—the lowest amount offered in the market. HSBC and Security Bank have the highest minimum loan amounts: Php2 million and Php1 million, respectively.

Most banks can lend 80 percent of a property’s appraised value. The final amount will depend on your annual income, and you can pay the sum you borrowed within up to 30 years.

Most banks also offer competitive interest rates averaging from 5.5 percent for the first year to 12 percent for 30 years, so shop around for the lowest rates. Expect the interest rates to go up as your loan tenor becomes longer.

BDO and BPI offer similar rates for new housing loan applications: 5.5 percent interest for a one-year tenor, 6 percent for two to three-year tenor, and 6.88 percent for a four to five-year tenor. If you want to pay your loan in 11 to 15 years, Security Bank offers the lowest interest rate: 9 percent, compared to over 11 percent in some banks. They also let you underpay or overpay your mortgage depending on your monthly budget, which would come in handy should you suddenly need extra funds for an emergency.

In the end, where you would choose to avail of a home loan will depend on your needs. Be thorough in your research: a home is a huge investment, and you really need to plan properly and review all the payment options available. It might be a big commitment, but the security and fulfillment you would get by being a homeowner will be worth it.


Main photo via Shutterstock

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