Housing loans in the Philippines: Everything you should know

Many foreigners dream of owning a property on one of the stunning Philippine islands. Getting a house loan can be difficult for people buying their first home or wanting to upgrade to a bigger one. This comprehensive guide seeks to simplify the process by highlighting the critical information you need about housing loans in the Philippines.

Can foreigners get a housing loan in the Philippines?

A housing loan is available to foreigners buying a property in the Philippines. There are various home loans, such as bank and Pag-IBIG Fund Home Loans. Upon loan maturity, foreign nationals who want to apply for a house loan must be between the ages of 21 and 65. In addition to submitting an Alien Certificate of Registration, they must fulfill the conditions for a visa. Foreign applicants for housing loans in the Philippines must also submit their proof of income from their home country.

Types of housing loans in the Philippines

When buying a property in the Philippines, there are numerous home loan options to consider. The following are the various kinds of housing loans in the Philippines:

Pag-IBIG Fund Home Loan

The Pag-IBIG Fund Home Loan is offered by the Home Development Mutual Fund (Pag-IBIG) to help Filipinos purchase residential property. Below are the key details of the Pag-IBIG Fund Home Loan.

Pag-IBIG housing loan requirements:

• Application form with recent ID photo.
• Proof of income.
• Valid ID (photocopy).
• Transfer Certificate of Title (latest and certified true copy).
• For condominiums: TCT of the land and Condominium Certificate of Title (certified true copy).
• Updated tax declaration and real estate tax receipt (photocopy).
• Contract to Sell or similar agreement.
• Vicinity map/sketch of the property.
• Health statement for borrowers over 60 years old and loan amounts from ₱ 2 million ($36,000) to ₱ 6 million ($108,000).

Interest rates:

• Rates per repricing period start at 5.75% for a one-year fixing period to 10% for a 30-year fixing period.

Loan terms:

• Repayment period of up to 30 years.

Benefits and advantages:

• Easier qualification process, even for low-income earners.
• Low and predictable interest rates help borrowers manage their finances effectively.
• Budget-friendly repayment terms that extend up to 30 years.

Bank housing loans

Banks provide housing loans in the Philippines under various terms and conditions. Here are some details regarding bank housing loans:

Eligibility criteria and requirements:

• Must meet the bank loan requirements in the Philippines and the bank financing requirements for housing loans.
• Submission of necessary documents such as proof of identification, income, and collateral.

Interest rates:

• Bank financing offers low interest rates that range from 4.99% to 6.25%.

Loan terms:

• Payment terms typically range from five to 25 years, depending on the borrower’s income source or type of employment.

Benefits and advantages:

• Faster loan processing, especially with the option to apply and submit documents online.
• Lower interest rates compared to other financing options.
• Affordable payment terms that cater to different financial situations.

How to apply for a housing loan in the Philippines?

If you’re considering applying for housing loans in the Philippines, below are four steps to help you through the process.

Step 1: Prepare the necessary documents

Before you begin applying for housing loans in the Philippines, gathering all the necessary documents is crucial. This will save you time and make the application process smoother. Here are the primary documents typically required by lenders:

• Completed application form.
• Two valid IDs.
• Marriage contract, if applicable.
• Application form for co-borrower, if applicable.
• Proof of income.
• Collateral documents.
• Bank statements for the last three months, credit accounts, or loan statements.
• Authorization to conduct a background check.

Make sure to check with your chosen lender for the specific documents they require.

Step 2: Choose the right lender

When getting a home loan in the Philippines, selecting the right lender is important. Lenders differ in terms of loan conditions, interest rates, and requirements. Pag-IBIG fund Home Loans and bank housing loans are two common options in the Philippines. To choose the best lender for your needs, use their home loan calculator before deciding. Consider factors including interest rates, loan periods, fees, and customer reviews.

Step 3: Fill out the loan application form

After you’ve chosen a lender, fill out the loan application form. The application form is available on the lender’s website or by visiting their branch. To avoid delays or complications during the loan application processing, ensure that you give accurate and complete information. Usually, the application form will ask for your personal information, financial information, and details about the land you want to buy.

Step 4: Submission and verification process

Once the loan application is completed, send it to the lender of your choice, along with the necessary paperwork. After that, the lender will verify your eligibility based on age, income, and credit history. The lender may also value the property by conducting an appraisal. This is to ensure the loan amount you are asking for corresponds to the property’s value. Once the lender completes the verification process and approves your application, you will receive an offer letter with the terms and conditions. Sign the loan agreement and any other required documents after thoroughly reviewing the offer.

Where can you find a housing loan in the Philippines?

When it comes to choosing housing loans in the Philippines, there are several reputable banks in the Philippines you can consider. While the Pag-IBIG Fund is popular, other banks offer competitive rates and flexible loan terms. If you’re looking for a convenient and time-efficient option, here are five top banks:

1. Banco de Oro (BDO)

BDO offers attractive interest rates and flexible loan terms for housing loans in the Philippines. They provide an easy online application and processing system. This loan can be used for various purposes, including purchasing a house, vacant lot, or condominium unit, home construction, renovation, reimbursement of acquisition cost, or refinancing.

• Loanable amount: Minimum of ₱ 300,000 ($5,400) for lot only, ₱ 500,000 ($9,000) for house and lot or condominium unit.
• Maximum loan amount: 90% of the property’s appraised value for the house and lot, 70% for the lot only.
• Interest rates for existing clients: 6.75% (1-2 years), 7.50% (3 years), 7.88% (5 years).
• Interest rates for new clients: 7% (1-2 years), 7.75% (3 years), 8.25% (5 years).
• Loan term: Up to 20 years.

2. UnionBank of the Philippines (UBP)

UBP provides various loan options to suit different borrower preferences. This home loan in the Philippines can be used for purchasing a house and lot property or condo unit, house construction, lot purchase, home refinancing, renovation, or expansion, and reimbursement.

• Loanable amount: Minimum of ₱ 500,000 ($9,000).
• Maximum loan amount: 90% of the property’s value for the house or lot.
• Interest rates: 9.50% (1-5 years).
• Loan term: Up to 25 years.

3. Bank of Commerce (BoC)

BoC offers reasonable rates, loan terms, and repayment options for different types of borrowers. They cater to local employees, self-employed individuals, and overseas workers. This loan can be used for purchasing a house and lot, townhouse, or condo unit, constructing a dream house on an already owned lot, major repairs, home improvements, or expansion of an existing house, as well as refinancing or taking out an existing housing loan.

• Loanable amount: Minimum of ₱ 500,000 ($9,000).
• Maximum loan amount: 90% of the property’s appraised value for house and lot or lot only.
• Interest rates: 7% (1-2 years), 7.5% (3 years), 7.75% (5 years).
• Loan tenure: Up to 20 years.

4. Maybank

Maybank provides customized financing solutions, including both fixed-rate and adjustable-rate loans. This home loan in the Philippines can be used for purchasing a house and lot, vacant lot, or condominium unit, as well as home equity, home construction, or refinancing.

• Loanable amount: Minimum of ₱ 500,000 ($9,000).
• Maximum loan amount: 90% of the property’s value for the house or lot.
• Interest rates: 6.5% (1-2 years), 7.25% (3 years), 8% (5 years).
• Loan term: Up to 25 years.

5. Rizal Commercial Banking Corporation (RCBC)

RCBC provides competitive interest rates and flexible loan terms for housing loans in the Philippines. This loan can be used for purchasing a house and lot, a vacant lot, or for home renovation, as well as serving as a multi-purpose loan or for home refinancing.

• Loanable amount: Minimum of ₱ 300,000 ($5,400).
• Maximum loan amount: 90% of the property’s value for the house or lot.
• Interest rates: 6.38% (1-2 years), 6.88% (3 years), 7.38% (5 years).
• Loan term: Up to 25 years.

Apply for a housing loan in the Philippines with Own Property Abroad

Do you want to apply for a housing loan in the Philippines? Understanding the regulations and property laws in the Philippines can be confusing, especially for foreigners. Own Property Abroad can assist you and ensure a seamless and hassle-free property journey.

Drop your details below or write us at [email protected] to get help getting a housing loan in the Philippines. We are ready to help you turn your real estate dreams into reality!

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