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How and Where to Get a Home Loan in the Philippines?

Note that almost all sellers do not lend 100% of the property price. Usually, buyers need to pay an equity portion (out of pocket) as down payment. Usually around 20-30% of selling price.

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In need of a home loan but don’t know where to start? Scared of all the paperwork but don’t have the funds to have your broker/agent do it for you? 

Who is the best home loan provider in the Philippines?

3D Realty Handshake

I had the same experience. And in this series of posts, I’d like to share my experiences to give you an overview of how a home loan works. 


Details may vary per loan provider but the gist should be more or less the same. Another entry will share the general steps in title transfer and annotation.

There are generally 2 types:


1. Home / Condominium loan where you loan to buy a house (and lot), and the said properties are mortgaged to the loan provider: in case of default, they can get the property to pay-off the debt.

2. Home equity loan meanwhile is when you take out a loan to buy not necessarily a house (for renovation, other purchases, etc) but just the same, the house and lot is the collateral, in case of default, you lose the house (and lot).

For #1, it can be that you don’t own the house yet, it can be that the house and lot to be used as collateral is the one you want to buy. For #2 though, you should own the property first before you can use it as equity for a loan.

Having said that, let us go deeper on home loans.


Locate the Property
Of course, you need to locate the property you want to buy via a home loan. You can look in property finders, ads, developer agents in malls, the actual subdivisions, banks also sell properties (either new or repossessed properties from previous loan clients who defaulted (naremata)) or friends or acquaintances. There are ready-for-occupancy (RFO), pre-sell (to be built in the next months or years), brand new or pre-owned.

Prepare Your (Our of) Pocket

Note that almost all sellers do not lend 100% of the property price. Usually, buyers need to pay an equity portion (out of pocket) as down payment. Usually around 20-30% of selling price. Others ask it in bulk (one-time payment) while others allow monthly down payments (3-12 months). Further, usually there is a loan-to-value (LTV) ratio cap, meaning the loan you can get is up to a certain % only of appraised property value, say 75-90%. So you really need to have spare cash in case you decide to go house hunting.

Locate the Lender

Then the rest, you get from a loan. I am familiar with three common types: In-house, Pag-ibig, Bank financing. Note that not all 3 are allowable to all properties being sold out there so you have to clear this with the seller of the property that you want.

In-house

Means you take-out a loan from the developer itself selling the property. They allow you to have the house but still the title is with them. You pay the down payment and monthly amortization to them, and once you’ve fully paid, you get the house and the title. In-house (for me, usually) is the most expensive, interest-wise as it usually averages 18% per year. They are also quite strict on defaults and missed payments. This is somewhat similar to a rent to own type since you pay the owner (seller) monthly. Loan terms are a bit heavy too, they usually offer up to 10 years only so monthly payments (@18%) is really heavy. Document requirements will be a bit easier to procure for in-house since the seller is also the one lending you. Turnaround time and processing is fastest here as well. Repayment is usually cash or PDCs.

Pag-ibig Financing 

This is with the government and you have to be a Pag-ibig member who has contributed at least 24months worth of Pag-ibig dues. Otherwise, you need to pay this in lump sum or accelerate the remaining of the 24 months to qualify for a loan. Pag-ibig is not available for all property types, and they usually have loan ceilings so multi-million houses most likely will not qualify (check their website at www.pagibig.gov.ph). Interest-wise, they are not too far from banks at around 9%. Loan term-wise, they are the most flexible which I think can reach 30 years. Document requirements and screening is more stringent for Pag-ibig than in-house (since the government needs to know if you can pay). Turnaround time for Pag-ibig may be the longest and the repayment is via salary deduction (i.e your Pag-ibig dues will be the monthly amortization). In terms of collections, they say Pag-ibig is the most lenient, they do not take your home outright in case of first few defaults (not unless your months in arrears of course).

Bank financing

Not sure of the process with other banks, whether it’s simple lang and maaasahan, but as follows is my experience with my bank provider. Document requirements may be at par or even stricter than that of Pag-ibig, and collections-wise, banks may rank in the middle of the 3 in terms of strictness for default loans. The interest rate usually ranges from 6-8% and tenor can reach as high as 25 years (depends on bank policy). They are not too selective of loan value and property, as long as they deem that they can collect from the area, and resell the property in case they need to take it from you due to default. Repayment is usually cash, PDCs or ADA to your bank account with them.

Not sure with the first two providers but banks have a repricing policy (usually every 3-5 years) wherein they re-assess the prevailing market rates and property prices and amend the loan terms you have with them (either lower or even higher interest rates).

So so far, that’s it when it comes to the three usual types of home loan financing. Watch out for my entry on the actual process and requirements, as well as title transfer details.

Disclaimer: This post is written based on experience and recall and only a small bit of research. It is meant to serve only as rough guide to the unfamiliar ones, such that when you finally discuss with the professionals, you have a bit of a background already. Of course, this is not the official guide to the topic (assuming an official one exists).


Photo: 3D Realty Handshake by Scott Maxwell

This work is licensed under a Creative Commons Attribution-ShareAlike 2.0 Generic License.

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About Geri (355 Articles)
Founder and main author. Husband, used-to-be-breadwinner, God-made multi-millionaire, employee, financial planner and adviser, investor, stocks trader, entrepreneur, agri-preneur, book author. Firm believer that all Pinoys deserve a richer life. Not a guru, but a forever student of the investments world, a work-in-progress.

1 Comment on How and Where to Get a Home Loan in the Philippines?

  1. I'm Marsha Goodman, and I'm a Mortgage Loan Officer committed to helping all of my clients fully explore their home loan options and feel confident about their choices. In my 35 years of experience working with third party affordable housing assistance programs, conventional conforming and “jumbo loans”, government loans, home equity lines of credit and investment property loans and more, I've been able to share my knowledge of the mortgage industry and especially the Peartrees City market. My website offers resources and calculators for your convenience, and I’m available to assist you at any point along the way toward meeting your home loan goals.Email Us: [email protected]

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