For most working-class Filipinos, buying a house is the pinnacle of years of hard work and dedication. However, not everyone can pay for their dream home outright, and saving enough cash to pay for a property in full takes a great deal of time.
This is why many buyers resort to housing loans, and fortunately, as the Philippine economy continues to grow and the need for residential space increases, many banks and financial institutions in the country now offer a variety of programs with flexible terms that make purchasing property easier for those on a budget.
If you are a first-time homebuyer, the number of options available can be overwhelming, and it is important to remember that buying a home not only involves your life savings, but it also your foreseeable financial future.
Almost all leading banks in the Philippines offer housing loans worth considering. Therefore, it is important to be best informed of each to choose the right one, which Lamudi has made a little easier by collecting basic housing loan details that the providers has made available online.
But First, What Exactly Is a Housing Loan?
A housing loan is financing option utilized for the purchase of a vacant lot, a house and lot, a townhouse unit, an apartment, or a condominium unit, or for funding a house construction or renovation. This can also be used to refinance already existing housing loans or to reimburse acquisition costs. There are currently two types of housing loans.
- Conventional Housing Loan
This type of housing loan allows borrowers to make fixed payments for a specified period of time. In the Philippines, this period is commonly 20 years for a minimum housing loan of Php500,000.
- Flexible Housing Loan
This type of housing loan is one that is connected to a current banking account, with the owner able to decrease the interest rate charges by way of depositing payments, as well as beginning principal repayment at any time.
Housing Loan Eligibility
Of course, before you can get a loan, you have to go through the needed approval process. Each bank has its own processes, which are generally based on the following criteria.
- Age
Generally, most banks require that home loan borrowers be at least 21 years old, with the maximum age at 65. However, as mentioned, there are a number of small differences between financial institutions. Union Bank, for example, is favorable to you if you happen to be an older borrower, as the limit is 70 years old, not the standard 65. Sterling Bank of Asia, on the other hand, only allows for a maximum borrower age of 60, you may still apply if are above this age if doing so with a co-maker.
- Employment
All banks require borrowers to be duly employed as they apply for a housing loan, often for at least 2 years. If you are self-employed or run a business instead, you would still be considered for approval, and would likely just have to submit more information regarding your taxes, income, and profits, as well as business permits and other related documents.
This can get very specific depending on which bank you apply to. For example, if you earn income via transportation, EastWest Bank would require you to submit copies of your Certificate of Receipt (CR) and Official Receipt (OR) from the Land Transportation Office, as well as your Land Transportation Franchising and Regulatory Board franchise documents.
- Income
Like with any loan at any financial institution, banks also require borrowers to earn a specified minimum monthly income to ensure their borrowers’ capacity to pay. Depending on which bank you borrow from, this could be your individual earnings, but is often the gross monthly income of your household.
China Bank, like most banks, generally requires a minimum monthly gross income of Php50,000 if you are a resident of Metro Manila or Metro Cebu. If you live and work outside of these locations, the minimum monthly gross income for you to be eligible for a China Bank housing loan is Php30,000. Metrobank, on the other hand, requires a minimum monthly income of Php30,000 regardless of the applicant’s place of residence.
- Citizenship
All Filipino citizens are eligible to borrow housing loans from banks in the Philippines, but foreign borrowers, or Filipinos who are no longer citizens of the country, would have to look into financial institutions that can lend to international clientele. Among those known to cater to both foreign nationals and Filipino citizens are the Philippine Bank of Communications (PBCom), the Philippine National Bank (PNB), and Rizal Commercial Banking Corp. (RCBC).
Housing Loan Terms, Amounts, and Interest Rates
An important factor to consider when choosing the best housing loan is the interest rate, and in choosing the best rate, the devil is in the details. Housing loan interest rates in the Philippines are highly influenced by the key rates of the Banko Sentral ng Pilipinas (BSP), which is currently at around 7.45 percent. Each bank has different terms, but most tend to offer a fixed interest rate in the first year, and the following years are subject to re-pricing.
Apart from the one-year fixed rate, you as an applicant can apply for multiple years at a fixed rate. The benefit to this is that it protects your loan from market fluctuations (such as economic shocks) that may cause your interest rate to shoot up, which in turn may cause your monthly amortization to become higher. However, should there be any significant dip in prevailing interest rates, your loan cannot benefit from it during the fixed period.
Banks tend to heavily promote their interest rates, as a low rate is indeed very favorable to borrowers. For example, a loan of Php1.4 million is borrowed to pay for a property worth Php1.5 million. With a Php100,000 down-payment in place, a loan tenor of 10 years, and a fixed rate of 10 percent, the monthly amortization roughly amounts to Php18,500 per month. Under the same terms but with a fixed rate of 9 percent, the monthly amortization becomes Php17,735 per month. This means that Php9,180 is saved per year or Php91,800 for the entire 10-year term when taking the lower rate.
These calculated figures, of course, are only estimates. Banks and other financing institutions have their respective factor rates and processes of calculating the monthly amortization, so the actual figures may vary. To get a good idea of what it could be, the following are the rates among banks that have openly marketed the exact interest they currently offer online.
Maximum Loan Terms
| Bank | Maximum loan terms |
| Asia United Bank | 20 years |
| BDO | 20 years |
| BPI | • 25 years (house and lot) • 10 years (vacant lot, residential condominium, business loan, refinancing, or multi-purpose loans) |
| Chinabank | • 10 years (condominium) • 15 years (vacant lot) • 25 years (house and lot) |
| Chinabank Savings | 25 years |
| China Trust Bank | 20 years |
| EastWest Bank | 30 years |
| HSBC | 20 years |
| Land Bank of the Philippines | Maximum of 20 years provided combined age of principal borrower and loan term shall not exceed 65 years |
| Maybank | • Home Equity: 10 years • Loan Refinancing: 15 years • Home Construction: 20 years (Home Construction) |
| Metrobank | • 25 years (lot, house and lot, lot and house construction, house construction on owned lot, townhouse, condominium, renovation, expansion, or reimbursement) • 15 years (refinancing or take-out) • 10 years (lot or personal investment) |
| PBCom | 20 years |
| PNB | • 10 years (lot purchase or home improvement) • 20 years (house and lot, townhouse, condominium unit, and house construction) |
| RCBC | Information not available |
| Robinsons Bank | 15 years |
| Security Bank | 20 years |
| Sterling Bank of Asia | 20 years |
| Union Bank | • 20 years (locally employed) • 15 years (Filipinos working abroad) |
| Veterans Bank | 20 years |
Minimum Loan Amount
| Bank | Minimum loan amount |
| Asia United Bank | Php500,000 |
| BDO | Php500,000 |
| BPI | Php400,000 |
| Chinabank | Information not available |
| Chinabank Savings | Php400,000 |
| China Trust Bank | Php500,000 |
| EastWest Bank | Information not available |
| HSBC | P700,000 |
| Land Bank of the Philippines | Php500,000 |
| Maybank | • Home Equity: Php500,000 • Home Acquisition: Php800,000 • Loan Refinancing: Php800,000 • Home Construction: Php1 million |
| Metrobank | Information not available |
| PBCom | Php500,000 |
| PNB | • Within Metro Manila: Php750,000 (house and lot, townhouse, or condominium) and Php500,000 (vacant lot) • Outside Metro Manila: Php500,000 (house and lot, townhouse, or condominium) and Php200,000 (vacant lot) |
| RCBC | Php300,000 |
| Robinsons Bank | Information not available |
| Security Bank | Php1 million |
| Sterling Bank of Asia | Php500,000 |
| Union Bank | Php500,000 |
| Veterans Bank | Php375,000 |
Maximum Loan Amount
| Bank | Maximum loan amount |
| Asia United Bank | Maximum loan amount of up to 80% of the appraised value |
| BDO | 80% of the appraised value |
| BPI | • Maximum of 70% of appraised value of house and lot • 60% of vacant lot or residential condominium • 80% of appraised value of house and lot not to exceed Php5 million (provided applicant is employed and purpose is for owner occupancy) |
| Chinabank Savings | Php25 million |
| China Trust Bank | Php25 million |
| HSBC | Php30 million (Home Equity), Php50 million (Home Loan) |
| Land Bank of the Philippines | • 70% of appraised value for loans of Php3.5 million and below • 60% of appraised value for loans above Php3.5 million |
| Maybank | • Home Equity: 60% of appraised value or Php5 million • Home Acquisition: 60% (vacant lot) or 80% (house and lot or condo or townhouse) • Loan Refinancing: 60% (vacant lot) or 70% (house and lot or condo or townhouse) • Home Construction: 80% of the appraised value of the land |
| Metrobank | • 70–80%: House and lot, Townhouse • 70%: Vacant lot • 60–70%: Condominium with or without parking slot |
| PBCom | Php20 million or up to 80% of the appraised value of the property, whichever is lower |
| PNB | Maximum loanable amount shall be the lowest of: • Actual need or 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 and lot, townhouse, and condominium • Up to 60% of the appraised value of the property or lot |
| RCBC | • Up to 70% of total contract price for vacant lots • 80% of appraised value of house and lot, townhouses, and condominium units • Subject to borrower’s loan-paying capacity |
| Robinsons Bank | Up to 80% of the property’s appraised value |
| Security Bank | Up to 80% of the property’s appraised value |
| Sterling Bank of Asia | Php10 million or up to 80% of the property’s appraised value |
| Union Bank | Up to 90% of property’s selling price |
| Veterans Bank | 80% of appraised value of the collateral, 60% on vacant lots |
Interest Rates
| BANK | Loan Program | 1 year | 2–3 years | 4–5 years | 6–10 years | 11–15 years | 16–20 years | 21–25 years | 26–30 years |
| BDO | 5.50% | 6.50% | 6.88% | 8.50% | 11.00% | 11.50% | |||
| BPI | Housing Loan | 5.25% | 6.00 % (2) 6.25% (3) | 6.88% | 8.50% | 9.50% | 11.50% | ||
| Property Equity Loan | 6.25% | 7.00% (2) 7.25% (3) | 7.88% | 9.50% | 10.50% | 12.50% | |||
| EWB | Home Loan | 5.50% | 6.25% | 6.75% | 8.50% | 9.50% | 11.00% | 11.00% | 11.00% |
| Home Equity | 6.00% | 6.75% | 7.25% | 9.00% | 10.00% | 11.50% | 11.50% | 11.50% | |
| MaB | Home Equity | 8.75% | 9.50% | 10.25% | |||||
| Home Acquisition | 6.00% | 6.25% | 7.50% | ||||||
| Loan Refinancing | |||||||||
| Home Construction | |||||||||
| MeB | 5.50% | 6.25% | 6.88% | 8.50% | 10.50% | ||||
| PNB | 5.75% | 6.50% | 6.75% | 8.50% | 10.25% | 10.75% | |||
| SB | Housing Loan | 5.25% | 6.25% | 7.00% | 8.00% | 9.00% | |||
| Property Equity Loan | 6.25% | 7.25% | 8.00% | 9.00% | 10.00% | ||||
| UB | 6.50% | 7.50% | 8.50% | 10.50% | 11.50% | ||||
| *Rates as of September 2017. These are indicative figures only and actual interest rates will be the prevailing rates during the time of loan availment. AUB, Asia United Bank; BDO, Banco de Oro; BPI, Bank of the Philippine Islands; CB, China Bank; CBS, China Bank Savings; CTB, China Trust Bank; EWB, East West Bank; HSBC, HSBC Philippines; LBP, Land Bank of the Philippines; MaB, Maybank; MeB, Metrobank; PBCom, Philippine Bank of Communications; PNB, Philippine National Bank; RCBC, Rizal Commercial Banking Corp.; RB, Robinsons Bank; SB, Security Bank; SBA, Sterling Bank of Asia; UB, Union Bank; VB, Veterans Bank. | |||||||||
Identification Requirements
| Bank | Requirements |
| Asia United Bank | • Application form • Marriage contract (if applicable) |
| BDO | • Application form • Government issued IDs • Marriage contract (if applicable) |
| BPI | • Application form • Co-borrower application form • Government issued IDs • Resume or Biodata |
| Chinabank | • Application form • Community tax residence certificate • Government issued IDs • Marriage contract (if applicable) |
| Chinabank Savings | • Application form • Government issued IDs • Marriage contract (if applicable) • Taxpayer identification number |
| China Trust Bank | • Application form • Government issued IDs • Marriage contract (if applicable) |
| EastWest Bank | • Application form • Government issued IDs |
| HSBC | • Application form • Government issued IDs • Marriage contract (if applicable) • Taxpayer identification number |
| Land Bank of the Philippines | • Application form • Government issued IDs • Resume or Biodata |
| Maybank | • Application form • Government issued IDs • Marriage contract (if applicable) |
| Metrobank | • Application form • Government issued IDs • Marriage contract (if applicable) |
| PBCom | • Application form • Government issued IDs • Marriage contract (if applicable) |
| PNB | • Application form • Co-borrower application form • Government issued IDs |
| RCBC | • Application form • Community tax residence certificate • Government issued IDs • Taxpayer identification number |
| Robinsons Bank | • Application form • Government issued IDs |
| Security Bank | • Application form • Government issued IDs |
| Sterling Bank of Asia | • Application form • Government issued IDs • Marriage contract (if applicable) |
| Union Bank | • Application form • Government issued IDs • Marriage contract (if applicable) |
| Veterans Bank | • Application form |
Are the Lowest Interest Rates the Best Interest Rates?
If considering only this factor, then yes. However, when factoring in the loan amount and the loan terms, then the right loan cannot be based solely on a low interest rate. You would also have to factor in how much you need to borrow, your current financial status, and your financial capacity to pay regularly for the foreseeable future.
It is important to remember that a longer loan tenor means lower monthly amortization, which is favorable for borrowers with limited monthly budget. This also means, however, that the life of the loan will be a longer, and the total interest charged for the duration will also be higher. Also, some banks have more stringent qualifications than others, so based on your eligibility, one lender might be more favorable than another.
Housing Loan Requirements
After deciding on the loan amount, interest rate, and payment terms that would best suit your needs and finances, there is still the matter of making the loan application. Like with every aspect of housing loans, each bank would also have a varying number of requirements over another.
For instance, with Bank of the Philippine Islands (BPI), if the borrower is married, the application form also needs to include the signature of his or her spouse. Maybank, on the other hand, requires that borrowers also submit a certificate of employment (COE) and income tax return (ITR) of their spouse, or a death certificate in the event that they are widowers.
Proof of Requirements – Locally Employed
| Bank | Requirements |
| Asia United Bank | • Certificate of employment • Income tax return • Pay slips |
| BDO | Certificate of employment |
| BPI | • Certificate of employment • Income tax return |
| Chinabank | • Certificate of employment • Deposit statement of accounts • Income tax return • Mortgage redemption insurance form |
| Chinabank Savings | No information available |
| China Trust Bank | • Certificate of employment • Income tax return • Pay slips |
| EastWest Bank | • Certificate of employment • Income tax return |
| HSBC | • Certificate of employment • Income tax return • Pay slips |
| Land Bank of the Philippines | • Certificate of employment • Pay slips |
| Maybank | • Certificate of employment • Deposit statement of accounts • Income tax return |
| Metrobank | No information available |
| PBCom | • Certificate of employment • Income tax return |
| PNB | • Certificate of employment • Income tax return |
| RCBC | Certificate of employment |
| Robinsons Bank | • Income tax return • Pay slips |
| Security Bank | • Certificate of employment • Mortgage redemption insurance form |
| Sterling Bank of Asia | • Certificate of employment • Income tax return • Pay slips |
| Union Bank | • Certificate of employment • Pay slips |
| Veterans Bank | • Certificate of employment • Income tax return • Pay slips |
BPI and PNB have additional requirements for self-employed borrowers, which depends on their line of work. PNB also requires additional documents from overseas Filipino workers (OFW) depending on the country where they are employed. On the other hand, Metrobank requires self-employed applicants to submit bank statements that include a BOO Certification of “No Overdraft” charges. It also requires a COE and ITR and pay slips to be submitted by applicants who are locally employed.
Proof of Requirements – Self-employed
| Bank | Requirements |
| Asia United Bank | • Department of Trade and Industry (DTI) business registration • Financial statements (audited if necessary) • Income tax return |
| BDO | • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • Income tax return • Proof of other income (if applicable) |
| BPI | • Articles of Incorporation and By-laws with SEC Registration Certificate • Bank statements or passbook • Deposit Statements of Accounts • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references |
| Chinabank | • Company profile • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references • Mortgage redemption insurance form |
| Chinabank Savings | • DTI business registration • Financial statements (audited if necessary) • GSIS, SSS, Driver’s License, or PRC ID |
| China Trust Bank | • Articles of Incorporation and By-laws with SEC Registration Certificate • Bank statements or passbook • Deposit statements of accounts • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references • Proof of other income (if applicable) |
| EastWest Bank | • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • List of trade references • Proof of income to credit commission-based income (for licensed real estate and insurance brokers) |
| HSBC | • Articles of Incorporation and By-laws with SEC Registration Certificate • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • Income tax return (ITR) • Mortgage redemption insurance form • Proof of other income (if applicable) • Proof of income to credit commission-based income (for licensed real estate and insurance brokers) |
| Land Bank of the Philippines | • DTI business registration • Financial statements (audited if necessary) • Income tax return |
| Maybank | • Bank statements or passbook • Company profile • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references |
| Metrobank | Bank statements or passbook |
| PBCom | • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references |
| PNB | • Articles of Incorporation and By-laws with SEC Registration Certificate • Company profile • DTI business registration • Financial statements (audited if necessary) • GSIS, SSS, Driver’s License, or PRC ID • Income tax return • List of trade references |
| RCBC | • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • Income tax return • List of trade references |
| Robinsons Bank | • DTI business registration • Financial statements (audited if necessary) • Proof of other income (if applicable) • Proof of income to credit commission-based income (for licensed real estate and insurance brokers) |
| Security Bank | • Articles of Incorporation and By-laws with SEC • Registration Certificate • Bank statements or passbook • Income tax return • Mortgage redemption insurance form • Proof of income to credit commission-based income (for licensed real estate and insurance brokers) |
| Sterling Bank of Asia | • Bank statements or passbook • Company profile • DTI business registration • Financial statements (audited if necessary) • Income tax return |
| Union Bank | • Bank statements or passbook • DTI business registration • Financial statements (audited if necessary) • Income tax return (ITR) • List of trade references |
| Veterans Bank | • DTI business registration • Income tax return |
Meanwhile, Security Bank requires one of either COE, ITR, 3 months’ worth of pay slips, or bank statements, but then requires at least six months of consecutive pay slips to credit commission. For self-employed applicants, Security Bank requires one of the following documents: financial statements, bank statements, or lease/rental contract.
Collateral Requirements – For Property Purchases Only
| Bank | Documents |
| Asia United Bank | • Floor or building plan or vicinity map • Statement of Account • Tax Clearance • Tax Declaration • Tax Receipt • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| BDO | • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| BPI | • Floor or building plan or vicinity map • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Chinabank | • Contract to sell or reservation agreement • Floor or building plan or vicinity map • Occupancy Permit • Statement of Account • Tax Clearance • Tax Declaration • Tax Receipt • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Chinabank Savings | No information available |
| China Trust Bank | • Appraisal Fee Official Receipt • Authority to inspect and verify • Bill of Materials or Cost Estimate • Floor or building plan or vicinity map • Floor or building plan or vicinity map • Statement of Account • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| EastWest Bank | • Appraisal Fee Official Receipt • Bill of Materials or Cost Estimate • Floor or building plan or vicinity map • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| HSBC | Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Land Bank of the Philippines | • Contract to sell or reservation agreement • Floor or building plan or vicinity map • Occupancy Permit |
| Maybank | • Floor or building plan or vicinity map • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Metrobank | • Bill of Materials or Cost Estimate • Contract to sell or reservation agreement • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| PBCom | • Bill of Materials or Cost Estimate • Floor or building plan or vicinity map • Occupancy Permit • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| PNB | • Appraisal Fee Official Receipt • Floor or building plan or vicinity map • Statement of Account • Tax Clearance • Tax Declaration • Tax Receipt • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| RCBC | • Floor or building plan or vicinity map • Tax Clearance • Tax Declaration • Tax Receipt • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Robinsons Bank | No information available |
| Security Bank | • Authority to inspect and verify • Tax Declaration • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Sterling Bank of Asia | • Appraisal Fee Official Receipt • Authority to inspect and verify • Bill of Materials or Cost Estimate • Floor or building plan or vicinity map • Statement of Account • Tax Clearance • Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
| Union Bank | • Contract to sell or reservation agreement • Statement of Account |
| Veterans Bank | Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) |
Given that a huge amount of money is normally involved in home purchases, it is understandable that banks are very thorough when it comes to housing loan applications and the list of requirements they ask for. Apart from the aforementioned requirements, there is also the following to consider with each lending institution.
- Appraisal Fee
- Handling Fee
- Notarial Fee
- Registration Fee
- Documentary Stamps Tax
- Mortgage Redemption Insurance Premium
- Fire Insurance Premium
These fees and taxes vary with each bank, and their corresponding rates are subject to change without prior notice. In addition, while a great deal of effort has been exerted in putting together this guide, the information presented here were sourced from the banks’ official websites and there are other details, requirements, and qualifications that may only be disclosed upon your personal inquiry with a loan officer.
Source: www.lamudi.com.ph
Sources: aub.com.ph, bdo.com, bpiexpressonline.com, cbs.com.ph, chinabank.ph, ctbcbank.com.ph, eastwestbanker.com, hsbc.com.ph, landbank.com, maybank.om.ph, metrobank.com.ph, pbcom.com.ph, pnb.com.ph, rcbcsavings.com, robinsonsbank.com.ph, securitybank.com, sterlingbankasia.com, unionbankph.com, veteransbank.com.ph
Main image via Deposit Photos
