If you’re a first-time homebuyer looking for a cozy home, securing your dream home may be more achievable than you realize. Whether you’re a local seeking to settle down or a Filipino abroad longing for a piece of home, these mortgage options will guide you on your journey to homeownership. Embarking on this life-changing journey becomes smoother when you have a better understanding.
Now, owning a home in the Philippines is easier than ever. Leading banks and financial institutions offer a range of housing loan options that provide a flexible path to homeownership. A housing loan can be vital when buying, renovating, constructing, or refinancing real estate.
Understanding Housing Loans
With the flourishing property market in the Philippine archipelago, various mortgage options have emerged, each with its benefits and details. These essential home financing paths can guide you toward your well-deserved threshold.
A housing loan, facilitated by banks or financial institutions, enables borrowers to fulfill their real estate goals without the immediate burden of paying it in full. This financial tool, pivotal for those lacking sufficient liquid funds, allows individuals to pay in manageable installments, transforming the dream of homeownership into a tangible reality.
To simplify the often intricate process of mortgage applications, here’s a reliable guide that provides prospective homeowners with tailored mortgage solutions aligned with their budget and lifestyle. Below, we break down each option, providing the necessary steps to help you make an informed decision.
1. Eligibility and Document Requirements:
Before diving into the housing loan application process, individuals must meet specific eligibility criteria and furnish essential documents.
| Eligibility: |
| Filipino citizenship |
| Age between 21 and 65 upon loan maturity |
| Stable income source from employment or business |
| Foreigners holding acceptable visas |
| Employed applicants need 2 years of steady work showing reliability |
| Minimum monthly salary of at least P50,000.00 |
| Documents Required: |
| Completed and signed housing application form |
| Clear copies of at least 2 valid photo IDs (e.g., Passport, Driver’s License, PRC ID, SSS ID) |
| Additional documents based on employment status (e.g., ITR, certificate of employment, payslips for employed applicants; DTI/SEC registration, financial statements, bank statements for self-employed applicants) |
| Self-employed applicants must provide their latest 6-month bank statements and authorization for bank verification; a Copy of DTI or SEC registration, audited financial statements from the last two years, etc; Provide a list of trade references, including at least three suppliers and three customers with their telephone numbers and contact persons. |
| Non-citizen applicants must provide a photocopy of the Alien Certificate of Registration (ACR) showing Permanent Immigrant Visa status, Alien Employment Permit (AEP), or Visa ID is required |
2. Leading Banks Offering Housing Loans:
Several prominent banks in the Philippines extend comprehensive housing loan solutions, catering to various needs such as home purchase, refinancing, or construction. Notable institutions include BPI, BDO, Metrobank, EastWest Bank, PBCOM, RCBC, Bank of Commerce, UnionBank, Maybank, and Security Bank.
3. Housing Loan Rates, Terms, and Charges:
Interest rates for housing loans vary among providers, influenced by eligibility, loan terms, and amounts. Prospective borrowers are advised to research and compare rates to secure the most favorable terms. Loan terms typically range from a minimum of 5 years to a maximum of 25 or 30 years, depending on individual preferences and financial capacities.
Turning Homeownership into Reality
Aspiring homeowners are encouraged to explore the diverse housing loan offerings in the Philippines, utilizing platforms like HousingInteractive to guide them through the process. The journey to homeownership becomes more manageable when armed with the right information and assistance.
1. Conventional Financing
A traditional method of obtaining a mortgage loan, Conventional Financing in real estate refers to a housing loan from a private lender, such as a bank or a developer, without government backing or insurance. Unlike government-backed loans, such as those offered by the Home Development Mutual Fund (HDMF) or the Government Service Insurance System (GSIS), conventional financing relies solely on the lender’s evaluation of the borrower’s creditworthiness and the property’s value.
a. Down Payment
Conventional loans often require a higher down payment compared to government-backed loans. The down payment typically ranges from 10% to 20% of the property’s purchase price. Below are the current down payment criteria for home loans offered by prominent financial institutions in the Philippines:
| Bank | Minimum Down Payment | Payment Terms | Additional Information |
| BPI | 10% | Flexible payment terms of up to 20 years | Subject to the property appraisal of the bank |
| BDO | 20% | Payment terms can be extended for up to 20 years | You can also take advantage of BDO’s all-in financing to cover other housing loan expenses, such as taxes, insurance premiums, mortgage registration, and others. |
| Metrobank | 20% | Enjoy payment terms of up to 25 years | Choose from a variety of other loan purposes such as construction, lot purchase, residential asset acquisition, reimbursement, refinancing, and personal consumption. |
| EastWest Bank | 20% | Financing terms up To 30 years | No Lock-In Period |
| PBCOM | 20% | Up to 20 years (depending on loan purpose) | Enjoy flexible payment terms |
| RCBC | 20% | 20 years | Minimum loan amount may vary depending on loan product |
| Bank of Commerce | 20% | From 10 to 20 years | Final loan approval shall be subject to the submission of required documents and the Bank’s credit policies and procedures |
| UnionBank | 10% | 20 years – Condominium 25 years – House and Lot and property under accredited developer with buyback agreement | Automatic Debit Arrangement via UnionBank Account |
| Maybank | 10% | Home Equity Loan – maximum term of up to 10 years MaxiHome Loan – Maximum loan term is 20 years | Loan for home acquisition, construction, refinancing, or home equity |
| Security Bank | 20% | Flexible payment terms up to 20 years | Quick approvalwithin 10 banking days, upon submission. of complete documents |
Please note that down payment requirements are subject to change, and it is advisable to contact the respective banks directly or visit their official websites for the most up-to-date information on housing loan terms and conditions.
b. Interest Rates
Interest rates for conventional loans can vary and may be fixed or adjustable. Borrowers with higher credit scores generally qualify for lower interest rates.
| Bank | Interest Rates (Per Annum) | Additional Information |
| BPI | Starting from 7.00% | With All-In Financing, you can roll bank fees into your loan amount and spread payments across the loan term for added convenience. |
| BDO | 1 year – 7.00% 2 years -7.50% 3 years – 7.75% 4 years -8.00% 5 years – 8.50% | Current bank customers benefit from reduced rates in contrast to new clients. |
| Metrobank | 1 year – 7.00% 2 years -7.25% 3 years – 7.75% 4 years -8.00% 5 years – 8.25% | Newly booked loans are subject to effective booking rates. For repricing rates, kindly reach out to your branch of account. |
| EastWest Bank | 1 year – 7.00% 2-3 years – 7.75% 4-5 years – 7.99% | Published rates may be altered without advance notice. |
| PBCOM | 9.25% – 1 year 10.50% – 3 years | Updated Home Loan Rate Sheet effective February 1, 2024. |
| RCBC | Starting from 7.00% | Loan options: Choose between low monthly payments or insurance coverage for the entire loan term. |
| Bank of Commerce | Starting from 7.00% | Minimum Loanable Amount of PHP 500,000 |
| UnionBank | From 6.5% rate | Current prevailing interest rate at the loan disbursal time. |
| Maybank | Starting from 6.75% – 7.50% rate | Avail of up to 90% of the appraised value of your house and lot, a condo, or a townhouse; 60% for residential lots |
| Security Bank | Promo rate 6.99%* | Special promotional rate for Home Loans. Additionally, benefit from their All-in Financing option to bypass upfront bank fees. |
The loan amount and monthly amortization mentioned are for reference. Final details will be provided in your loan documents upon approval. Approval is subject to document submission and compliance with the financial institution’s credit policies.
2. Government Housing Loans
a. Pag-IBIG Housing Loan:
Pag-IBIG Fund, known for affordable housing finance in the Philippines, helps Filipinos achieve homeownership dreams with its housing loan program. Eligibility criteria focus on active members, offering various loan purposes. Pag-IBIG is a trusted partner for home builders.
Eligibility Criteria
- Active Pag-IBIG Fund member with at least 24 months of savings.
- Not more than 65 years old at the date of loan application, with a maximum age of 70 at loan maturity.
- Legal capacity to acquire and encumber real property.
- No history of Pag-IBIG housing loan foreclosure, cancellation, buyback, or voluntary surrender.
- Existing Pag-IBIG Housing account or Short Term Loan (STL) payments must be up-to-date.
Loan Purpose
- Purchase (plus the cost of transfer) of a residential lot or adjoining residential lots (max 1,000 sq.m.).
- Purchase (plus the cost of transfer) of residential house & lot, townhouse, or condominium unit (old or brand new, property mortgaged with the Fund, adjoining houses/units) inclusive of a parking slot.
- Construction of a house.Improvement of a house.Refinancing of an existing housing loan.
- Combined Loan Purposes.
Requirements: To streamline the application process, Pag-IBIG has outlined the requirements, including:
From Borrower:
- Housing Loan Application with a recent ID photo of borrower/co-borrower (if applicable) (2 copies, HQP-HLF- 068/HQP-HLF- 069).
- Proof of Income.
Proof Of Income For Locally Employed (any of the following):
- Certificate of Employment and Compensation (CEC).
- Latest Income Tax Return (ITR) for the year immediately preceding the loan application date.
- One (1) Month Payslip, within the last three (3) months before the loan application date.
For Self-employed:
- ITR, Audited Financial Statements, and Official Receipt of Tax Payment.
- Commission Vouchers reflecting the issuer’s name and contact details.
- Bank Statements or passbooks for the last 12 months.
For Overseas Filipino Workers (OFW):
- Employment Contract or POEA Standard Contract.
- Notarized Certificate of Employment and Compensation (CEC).
- One (1) valid ID (Photocopy, back-to-back) of Principal Borrower and Spouse, Co-Borrower and Spouse, Seller and Spouse, and Developer’s Authorized Representative and Attorney-In-Fact (if applicable).
From Seller and/or Borrower
- Transfer Certificate of Title (TCT) (latest title, Certified True Copy).
- For the Condominium Unit, present the TCT of the land and Condominium Certificate of Title (CCT) (Certified True Copy).
- Updated Tax Declaration (House and Lot) and Updated Real Estate Tax Receipt (photocopy).
- Vicinity Map/Sketch Map leading to the Property subject of the loan
Conclusion
Your mortgage choice is a pivotal step in your homeownership journey, influencing your financial well-being and the overall experience of purchasing property in the Philippines. As you assess these seven options, remember to approach this decision with thorough research and, if possible, professional advice.
Before making any commitments, review your financial standing and future aspirations. Whether it’s through a government-initiated program, traditional bank financial support, or even support from property developers, the Philippines brims with options to make your home dreams a reality.
Encourage fellow first-time homebuyers to explore these options, share their experiences, and seek clarity on any questions. The more informed the collective homebuyer community is, the more vibrant and confident the Filipino real estate market grows. Embrace this exciting chapter with an open mind, and watch as your dream home dovetails into a comfortable reality.
