For many workers and business owners in the Philippines, buying a home is not only a major financial goal but also a symbol of stability and success. After a long day of work or managing a business, there’s nothing quite like coming home to a place that’s truly your own. However, the process of homeownership can feel daunting, especially when figuring out how much income you need to afford the property you want. Whether you’re a salaried employee or an entrepreneur, understanding how your homebuyer income affects your mortgage and overall purchasing power is essential. This guide will walk you through real-world property examples, showing what income levels are required and how to plan for one of the most important purchases you’ll ever make—your home.

But before we dive into specific property examples, it’s important to understand the factors that determine how much homebuyer income is needed in the Philippines. The first consideration is the Total Contract Price (TCP), which is the price of the property you want to buy. 

Next is the Down Payment, which is typically 10-20% of the TCP and must be paid upfront. Once you’ve covered that, the remaining balance becomes the Loan Amount, which you will finance through a mortgage. The resulting Monthly Amortization is the amount you’ll need to pay each month, and this depends on the interest rate and loan term. Finally, lenders consider your income-to-amortization ratio, meaning that most banks require that your monthly amortization does not exceed 30-40% of your gross monthly income. With this in mind, let’s explore specific examples of how much homebuyer income is needed for various types of properties.

Understanding the Debt-to-Income Ratio (DTI)

A key factor for lenders is your Debt-to-Income Ratio (DTI). It measures how much of your monthly income goes toward debt payments, including your mortgage. According to the Bangko Sentral ng Pilipinas (BSP), a DTI ratio of 30% or lower is ideal for homebuyers. Keeping your DTI below this ensures you can comfortably afford your mortgage payments without straining your finances. Conclusively,  it remains important that your homebuyer income allows you to maintain a healthy DTI. Otherwise, you might be paying for your monthly mortgage while sacrificing equally important things like health insurance, education costs, and even vacation trips.   

4 Examples of Homebuying Scenarios

This section aims to answer that question by using real-world examples of properties and what income levels are required to buy them. We’ve used standard assumptions in the calculations. The down payment is 20% of the total contract price (TCP), which buyers typically pay upfront unless the developer offers financing for the down payment. The remaining balance is financed through a bank mortgage unless the project is Pag-IBIG accredited in which case Pag-IBIG is used. Loan terms vary from 15 to 30 years, depending on the lender. These examples should help you decide what homes are affordable based on your homebuyer income.

Sample Property 1: Urban Deca Manila (Studio Unit)

Urban Deca Manila offers a more affordable housing option for first-time buyers. A studio unit here starts at ₱1,812,080. The initial cashout is ₱10,000, with Pag-IBIG financing over 30 years. Your monthly amortization is only ₱11,203.58.

To afford this property, your homebuyer income should be three times your monthly amortization. Therefore, you’ll need to earn at least ₱38,000 per month. This translates to about ₱456,000 annually, keeping your mortgage affordable based on the 30% DTI ratio.

Sample Property 2: Ridgewood Towers Premier (1-Bedroom Unit)

Ridgewood Towers Premier offers a one-bedroom unit priced at ₱3,800,000. The down payment is 20%, which amounts to ₱760,000. The remaining balance of ₱3,040,000 can be financed over 15 years. Your monthly amortization would then be ₱27,324 at a 7% interest rate.

To stay within the recommended DTI ratio, your homebuyer income should be around ₱91,000 per month, or about ₱1,092,000 annually. This ensures that your mortgage payments don’t consume more than 30% of your income, keeping your finances balanced.

Sample Property 3: Chimes Greenhills (1-Bedroom Unit)

For those looking for a premium option, Chimes Greenhills offers a one-bedroom unit priced at ₱7,382,548.37. The down payment of ₱1,476,509.67 leaves a balance of ₱5,906,038.70. With a 15-year loan term, the monthly amortization is ₱53,085.15, using the same interest rate.

To afford this property, your homebuyer income should be ₱177,000, or ₱2,124,000 annually. This income level keeps your mortgage payments manageable while giving you the luxury of living in Greenhills.

Sample Property 4: Valencia Hills (2-Bedroom Unit)

If you need more space, Valencia Hills offers a two-bedroom unit priced at ₱10,516,071.43. The down payment is 20%, or ₱2,103,214.29, with a balance of ₱8,412,857.14. This balance can be financed over 15 years, with monthly amortization at ₱75,617.14, assuming a 7% interest rate.

To comfortably afford this property, your homebuyer income should be around ₱252,000, or ₱3,024,000 annually. This ensures your mortgage remains within a safe range, based on the 30% DTI ratio, which is crucial for managing household finances.

Other Factors to Consider When Buying a Home

The sample computations above give you a rough idea of what income you’ll need. However,  other factors will affect your ability to afford a home. For example, interest rates can vary, affecting your monthly payments. Additionally, other costs such as property taxes, insurance, and association dues will impact your budget. Moreover, loan approval requirements, such as credit scores and employment history, play a significant role in determining the terms of your loan.

Home Prices vs. Income in the Philippines

According to the Philippine Statistics Authority (PSA), the average monthly salary in Metro Manila is ₱18,900. For many, this income won’t be enough to afford most properties on this list. In particular, even the Urban Deca Manila studio unit requires a monthly income of ₱38,000—about double the average NCR salary.

This affordability gap highlights a challenge faced by many Filipinos. Therefore, many buyers explore Pag-IBIG financing, which can offer lower interest rates and longer loan terms. Alternatively, you can choose to explore locations outside Metro Manila. In fact, places like Cavite or Laguna may offer more budget-friendly options and wider spaces.

Strategies to Make Homeownership More Attainable

If you’re struggling to meet the income requirements for your desired home, there are a few strategies to consider. First, increasing your down payment can reduce your loan amount and lower your monthly amortization. 

Alternatively, you could opt for longer loan terms, which spread the payments over more years but increase the total interest paid. Furthermore, you can lower your costs by looking for properties in more affordable locations outside Metro Manila. Last, you can also try applying for a loan with a co-borrower, which can also help you meet the income requirements.

Can You Afford Your Dream Home with Your Current Homebuyer Income?

Affording a home in the Philippines depends on several factors, including homebuyer income, the size of your down payment, and your loan terms. By keeping your DTI below 30%, you can ensure your monthly mortgage payments are manageable. The properties we’ve discussed range from affordable studio units to premium two-bedroom condos, offering a broad perspective of what’s possible at different income levels.

Before making any major financial decisions, it’s always wise to consult with financial advisors or mortgage brokers. They can help you navigate the loan process and ensure you’re getting the best deal for your financial situation.

Ohmyhome can help you find your dream home

When searching for the perfect home, Ohmyhome can help you get off to a great start. For one, we have amassed a considerable listing from over 200 of the country’s top real estate developers. Our licensed real estate professionals and friendly customer service specialists will be happy to answer your questions or direct you to plenty of choices. 

Even better, Ohmyhome helps you get the best advice on all things properties. You can enlist the help of our partner banks to get the best deals available. We’ll also be on hand to help with your home loan applications as well. And when the deal is done, we’ll be more than happy to assist you in fulfilling your documentation and filing requirements. Message us so we can help you find your dream home. Or for a more complete homebuying experience, sign up for a free Ohmyhome account today!