Buying and owning a home is an aspiration shared by many Filipinos, and is considered the pinnacle of years of hard work and sacrifice. Unfortunately, not everyone has the ability to fully pay for their dream homes outright, and simply saving money to do so takes a significant number of years–to the point that there might not even be enough time to actually reside in the home saved for.
This is the reason why many use home loans. Luckily, there are a number of financial institutions offering different programs that make buying a new home in the Philippines much more feasible. If buying a home for the first time, the number of financing options can actually be overwhelming, and it is important to know that a home purchase does not only involve your life savings but also your finances for the foreseeable future.
With that, almost all of the most notable banks in the Philippines offer home loans that are worth considering, making choosing a matter of how amenable you are to the specifics each loan had, which Ohmyhome makes easier to compare by gathering everything that local banks have made available on their websites.
First, some home loan basics
By definition, a home loan is a financing option that can be utilized for the purchase of a vacant lot, a house and lot, a townhouse unit, an apartment, or a condominium unit; OR for the financing of the construction or renovation of a home.
Home loans can also be used to refinance existing home loans or to reimburse acquisition costs. There are currently two types of home loans.
- Conventional Home Loan
This loan allows borrowers to make fixed payments for a specified period of time. In the Philippines, this can commonly last for up to 20 years and for a minimum of Php500,000.
- Flexible Home Loan
This type of home loan where it is connected to an existing banking account, with the account owner is able to affect the interest rate charged by way of depositing payments and/or beginning principal repayment at any time.
Home Loan Eligibility
Of course, before the receipt of a loan is the completion of the needed approval process. While each financial institution has its own, these are more or less based on general criteria:
Most banks require that home loan borrowers be at least 21 years old, with the maximum age at 65. However, as earlier mentioned, there can be differences between financial institutions. Union Bank, for example, has a maximum borrower age limit of 70 years old, not the standard 65. Sterling Bank of Asia, on the other hand, has a maximum age of 60, although borrowers older than this can still apply with a co-maker.
All banks require borrowers to be duly employed at the time of their application for a home loan, and usually for at least 2 years. For borrowers who are self-employed or run a business, additional information pertaining to their taxes, income, and/or profits, as well as business permits and other related documents, will likely be required before approval.
Like with almost any type of loan, banks also require that borrowers are earning a specified amount each month to best ensure capacity to pay. Income could be measured through individual earnings, but more often than not is the gross monthly income of the home for most banks.
Filipino citizens are all eligible to borrow home loans from banks in the Philippines. Foreign applicants, or Filipinos who are no longer citizens of the country, would have to consider banks that lend to an international clientele. Among those known to offer loans to both foreign nationals and natural-born Filipinos are the Philippine Bank of Communications (PBCom), the Philippine National Bank (PNB), and Rizal Commercial Banking Corp. (RCBC).
Home Loan Terms and Amounts
When applying for a home loan, or any loan for that matter, it is important to take into consideration the loan terms given. This plays a hand in how long payments will have to be made and for how much. Of course, the longer the terms chosen, the smaller the amount is to be paid monthly, although this also means paying a larger total sum. Extended loan terms are ideal for property buyers who don’t quite have the funding for immediate purchase, but are consistently earning and expect to do so for the foreseeable future.
Banks offer varying loan terms, although most provide the option to pay at a maximum of twenty years. Similarly, the minimum and maximum loan amounts differ between financial institutions, along with the qualifications needed and the types of properties the loans can be utilized for.
|HOUSING LOAN TERMS AND AMOUNTS|
|BANK||Maximum loan terms||Minimum loan amount||Maximum loan amount|
|Asia United Bank (AUB)||20 years||P1,000,000||Maximum loan amount of up to 80% of the appraised value|
Banco de Oro (BDO)
|10 years (Vacant Lot)||P300,000|
70% of the appraised value
|15 years (Condo Unit)||P500,000|
|20 years (House & Lot, Townhouse, Construction)||P500,000||80% of the appraised value|
Bank of the Philippine Islands (BPI)
|10 years (Vacant Lot, Residential Condominium)|
|60% of the appraised value of a vacant lot or residential condominium|
|25 years (House and Lot)||70% of the appraised value of house and lot|
80% of the appraised value of house & lot not to exceed P5M (provided applicant is employed and purpose is for owner occupancy)
|China Bank||10 year (Condominium Unit)|
15 years (Vacant Lots)
25 years (House and Lots)
|China Bank Savings||15 years (Condominium or Vacant Residential Lot)|
25 years (House and Lot, House Construction and Renovation, or
Purchase of a Townhouse Unit)
|China Trust Bank||20 years||P500,000||P25 Million|
|EastWest Bank||30 years|
|P30 Million (Home Equity)|
|P50 Million (Home Loan)|
Land Bank of the Philippines
*Provided combined age of principal borrower and loan term shall not exceed 65 years
|For Private Applicants: |
The borrowing capacity of the individual borrower and his/her spouse (if applicable) shall be based on the 30% of the verified Gross Monthly Income for private applicants gross monthly income
|For Government Employees:|
The borrowing capacity shall be based on the amount as required by GAA, after housing loan amortization
|10 years (Home Equity)||P500,000||60% of your home’s appraised value or borrow up to P5 million (whichever is lower)|
|15 years (Loan Refinancing)||P800,000||70% of the appraised value of your house and lot, townhouse, or condominium (up to 60% for a vacant residential lot)|
|Borrower’s age plus the term of the loan should not be more than 65 years old once the loan matures (Home Acquisition)||P800,000||80% of the appraised value of your house and lot, a condo, or a townhouse (60% for vacant lots)|
|Philippine Bank of Communications (PBCom)||20 years||P500,000||P20 Million|
|Philippine National Bank (PNB)||10 years (Vacant Lot / Home Improvement)|
20 years (House & Lot, Townhouse, Condominium Unit & House Construction)
|Within Metro Manila: P750,000 (house & lot/ townhouse/ condominium), P500,000 (vacant lot)|
Outside Metro Manila: P500,000 (house & lot/ townhouse/ condominium), P200,000 (vacant lot)
|The maximum loanable amount shall be the lowest of: |
Actual Need, Paying capacity (up to 30% of gross monthly income can be used as amortization),
Up to 80% of the appraised value of the property for house & lot, townhouse & condominium,
Up to 60% of the appraised value of the property or lot.
|Rizal Commercial Banking Corp. (RCBC)||20 years|
✓Employed borrowers must be at most 65 years old upon loan maturity
✓Self-employed borrowers must be at most 70 years old upon loan maturity
|P300,000 (Home Renovation)|
Up to 80% of the appraised value of house and lot, townhouse, or condominium unit
Up to 70% of appraised value if vacant lot only
|Robinsons Bank||20 years (Locally Employed)|
15 years (OFW and Self-employed)
|Up to 90% of the total contract price (Accredited Developers)|
Up to 80% of the appraised value (Non-Accredited Developers)
|Security Bank||20 years||P1 Million||Up to 80% of the property’s appraised value|
|Sterling Bank of Asia||25 years, with borrower’s age upon maturity not exceeding 65||P500,000.00||P10 Million or up to 80% of the property’s appraised value|
|Union Bank||20 years||P500,000|
|United Coconut Planters Bank|
20 years (Construction and Acquisition of House & Lot, Townhouses and Condominium Units)
10 years (Refinancing, Multi-purpose Loans, Vacant Lots)
Maximum of 70% of the appraised value for houses and lots, townhouses, and condominium units
Maximum of 60% of the appraised value for vacant lots
Maximum of 80% of the contract price for accredited developers
|Veterans Bank||20 years||P375,000||80% of the appraised value of the collateral, 60% on vacant lots|
|*** These rates as of January 2021. These are indicative figures only and actual interest rates will be the prevailing rates during the time of loan availment. ***|
Arguably the most delved into aspect when choosing a home loan is the interest rate, which really isn’t surprising given how the right one can help keep what has to be repaid at a minimum. Similarly, an unfavorable rate would mean paying more or for longer or both.
Home loan interest rates in the Philippines are highly influenced by the key rates of the Banko Sentral ng Pilipinas (BSP). Again, these differ between banks, with many not even disclosing interest rates given how often they have to adjust to the financial market. But for the most part, most tend to offer a fixed interest rate in at least the first year, with the following years subject to re-pricing.
The benefit to fixed rates is that it protects your loan from market fluctuations (such as economic shocks) that may cause interest rates to shoot up, which in turn cause the monthly amortization to become higher. This however also works the other way around, where if prevailing interest rates become lower, loans within their fixed period won’t have lower monthly amortizations.
Interest Rate (based on Fixing Period)
Asia United Bank (AUB)
Banco de Oro (BDO)
Bank of the Philippine Islands (BPI)
Regular Home Loan