• Home Loan Interest Rates in Philippines

    Owning a home gives us immense satisfaction and a sense of achievement. It is an affair that takes years of intense savings and planning. Owing to ever growing costs of procuring a home, it's not an easy deal to fulfill the monetary obligations on our own. A route that we often think of to help achieve our housing dreams is the home loan. It helps us by funding a larger share in the costs involved and lets us payback the amount borrowed in monthly installment payments along with applicable interest charges.

    The Philippine housing loan market is a healthy mix of loan options in the public as well as private space. Whilst, Pag-IBIG is the leading option in the public domain, a plethora of indigenous and MNC banks & institutions offer attractive loans schemes for various housing needs such as buying a house/condo or a plot, construction of home or towards renovation needs.

    As a home loan aspirant, the foremost factor we look forward to is the interest rate charged by the bank on the loan offered. Since paying off a loan is a long term commitment, the obvious choice of the loan will be the one with pleasing interest rates. Lets look at some of the factors involved in determining the interest rate offered to you.

    Housing Loan Interest Rates in Philippines

    The rates are predominantly influenced by the published rate by Bangko Sentral ng Pilipinas(BSP), the apex regulatory bank in the country. This rate is also known as base rate and acts as index for banks and financial institutions to design interest rates offered on their retail loans.

    The rates can be either be “Fixed” for the entire term or “Variable” depending on what you opt for at the time of applying or during the repayment tenor (if the bank is open to these tweaks). Lets look at some of the factors that will influence the interest rate.

    1. Type of Property or its Location: When we mean the type of property, we mean its identity. The property can be an independent home, a condo unit, an empty lot and so on. The location ( Metro Manila or countryside) also has a bearing on the rate being offered to you by the bank.
    2. Loan Tenor: The tenor (term) you choose initially is a key determinant to ascertain the rate offered. The thumb rule is, short the tenor, lower the interest rate. Your bank will maintain a tenor based rates slab, to be communicated to you during application submission.
    3. Loan Amount: The quantum of loan you avail from the bank speaks when they decide the rate. If you’re willing to avail a higher quantum of loan, chances are that you will be offered a lower rate of interest on the borrowed amount.
    4. Prevailing Offers & Tie Ups: During festive and promo offers, the bank may offer a reduction in the standard rate, to attract customers. As a diligent borrower, inquire with the representative about such time bound offers. Banks and Financial Institutions also tie up with property builders and developers to offer exclusive schemes if you’re buying a specific property.
    5. Income & Creditworthiness: Your income group and credit background has an important say when in deciding the rate of interest. Applicant with a sound credit history can confidently negotiate for a lower rate of interest. People with a higher income are likely to be eligible for better schemes.

    Interest Rates offered on by Leading Banks in Philippines on Housing Loans

    1. BPI Family Housing Loan
    2. The interest rates offered by BPI is one of the most competitive in the Philippine housing loan market. It follows a method of determining interest rates on the basis on the tenor.

      Fixing Period Interest Rate
      1 year 5.50 percent
      2 - 3 years 6.00 percent
      4 -5 years 6.88 percent
      6 - 10 years 8.00 percent
      11 - 15 years 9.50 percent
      16 - 20 years 11.50 percent

      **The repricing for existing housing loan borrowers is fixed at the rate of 7.00 percent per annum**

    3. BDO Housing Loan
    4. A leading bank in the housing loan segment, the interest rates offered by BDO is done on a “Fixing” basis and is subject to change without periodic notice. Please check with the nearest branch before applying.

      Fixing Period Interest Rate
      1 year 5.50 percent
      2 - 3 years 6.50 percent
      4 -5 years 6.88 percent
      6 - 10 years 8.50 percent
      11 - 15 years 11.00 percent
      16 - 20 years 11.50 percent

      **The repricing for existing housing loan borrowers is fixed at the rate of 7.00 percent per annum**

    5. EastWest Bank Housing Loan
    6. EastWest bank offers housing loans for a wide range of requirements such as acquiring a home, condo or a lot, construction and improvement along with exclusive products such as home equity. Refer to the table below provides details of fixed rate charged by the bank for various tenor options.

      Fixing Period Interest Rate (Board Rate)
      1 year 6.00 percent
      3 years 6.75 percent
      5 years 7.25 percent

      The bank offers fixing of interest rates for up to 30 years to help you save charges that helps in hedging against frequent rate fluctuations.

    7. MetroBank Housing Loan
    8. This Makati City headquartered banking major offers a wide range of retail loans such as housing loans for fulfillment of a wide range of housing requirements. The rate offered by Metrobank on housing loans is based on the fixing principle to protect you from future rate fluctuations. The table below provides insight into rates offered for various fixing period.

      Fixing Period Interest Rate
      1 year 6.00 percent
      2 years 7.00 percent
      3 years 7.00 percent
      4 years 7.50 percent
      5 years 8.00 percent
      6 - 10 years 9.50 percent
      11 - 15 years 10.50 percent

      The above rates are indicative and are subject to revision without notice. Please check with the bank or customer service wing for up to date rates.

    9. HSBC Housing Loan
    10. This leading MNC bank operating in the Philippines offers one of the lowest interest rates on housing loans in the country. Plus, one can also benefit from the “reducing balance” method of computing charges where interest is only applied to the outstanding balance.

      Fixing Period Interest Rate
      1 years repricing 4.99 percent
      5 years 6.49 percent

      The rates above are subject to change without prior notice. The EIR(Effective Interest Rate) will be computed by the bank on basis of several input factors.

    11. PNB Housing Loan
    12. PNB extends up to 80 percent of the appraised property value as the loan amount in case of house & lot, condo & townhouse and up to 60% of the appraised value in case of just a lot. With PNB, you can be sure of getting the best housing loan deal. Let's take you through the interest rate slabs, charged on fixed period basis.

      Fixing Period Interest Rate
      1 year 5.75 percent
      2 - 3 years 6.50 percent
      4 -5 years 6.75 percent
      10 years 8.50 percent
      15 years 10.25 percent
      20 years 10.75 percent

      The bank perhaps offers the lowest interest rates for fixing period of 1 - 5 years.

    13. Security Bank Housing Loan
    14. Security bank offers a whopping 90% finance on the appraised value of the property and provides one the lowest interest rates in the country in the housing loan segment. Along with provision of loan for a wide range of housing need, it also offers Home Equity loan to aspirants who are willing to refinance them existing home.

      The table below offers a sneak peak into the current rates offered by Security bank. Please be sure to check with the nearest branch since they are subject to change without prior approvals.

      Fixing Period Interest Rate
      1 year 5.25 percent
      2 - 3 years 6.25 percent
      4 -5 years 7.00 percent
      6 - 10 years 8.00 percent
      11 -15 years 9.00 percent

    This loan product comes at fast processing time of just 5 banking days, thus helping you to close the deal faster.

    Tips and Advice

    Borrowing money for your housing dream comes with a long term commitment of making amortization payments over the tenor chosen. As a well informed borrower your goal should not only be to apply for a loan with the lowest interest rates. Factors such as fees and charges, hidden monetary implications should be taken into consideration before making an application. After all, you don’t want to feel trapped for having availed a loan that does not holistically meet your requirements.

    Other than private players, you can also look at such as the Pag-IBIG to take advantage of humble features and benefits offered along with pleasing interest rates. As an educated borrower, compare features and rates offered by leading bank in Philippines on a comparision site such as BankBazaar.ph to get first hand information about the products. Once the initial scrutiny is complete, you can contact the chosen banks or visit their website for further and up to date information.

    Housing Loans By Bank
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    Housing Loan Refinancing by Banks
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