All Filipino families dream of owning a home they can call their own. However, many still struggle to fulfill this desire, given the cost of house construction.
Many banks and financial organizations provide financing options for home purchases. However, if you prefer a flexible-term, long-term home loan, there’s the Home Development Mutual Fund or Pag-IBIG housing loan program.
Pag-IBIG housing loans are the best option for Filipinos due to longer loan terms (up to 30 years). Moreover, the agency allows many members to apply for multiple loans on the same property and enables salaried members up to 65 years of age to do so.
Below is a comprehensive guide for applying for a housing loan from Pag-IBIG Home Development Fund.
Your monthly salary deduction or amortization amount will depend on the following factors:
The Pag-IBIG approved loan amount is the maximum housing loan that you are eligible to receive. On the other hand, the loan period, also known as the loan repayment period, is the time you will make monthly amortization payments.
Although 30 years is the maximum loan term, Pag-IBIG advises selecting ten years or less to avoid paying higher interest. However, if you decide to take out a loan with a 30-year maximum loan term, remember that the first ten years will essentially be used to pay off the annual percentage rate only.
Meanwhile, the fixed pricing period determines the length of a fixed interest rate application.
For instance, if you select a one-year fixed pricing period, the interest rate will be 5.750% for the first year. This annual percentage rate will be recalculated after the initial year and may increase or decrease depending on the prevailing economic conditions in the following years.
You can determine if you qualify for a Pag-IBIG housing loan using the following criteria:
Given the requirements above, obtaining a PAG-IBIG housing loan is restricted by advanced age. This is usually the case, regardless of whether you borrow from Pag-IBIG or another bank financing.
Generally, your housing loan’s monthly amortization amount should not exceed a third of your overall gross monthly income. Many financial organizations use this criterion when evaluating loan applicants.
However, Pag-IBIG allows amortization (meaning principal plus interest) of up to 40% of net disposable income instead of just gross monthly income.
Prior to applying for a housing loan from Pag-IBIG, you must diligently check these restrictions.
The requirements for a Pag-IBIG loan are as follows. They may also include other Pag-IBIG documents that need to be signed and filed.
The personal requirements for the Principal Applicant, Spouse, and Attorney-in-Fact for Self-Employed, Locally Employed, and overseas Filipino workers are as follows. They may also include other Pag-IBIG documents that need to be signed and filed.
The Pag-IBIG Fund Information Officer in countries where the member is employed must properly authenticate and certify all other Proofs of Income, whether they are original or photocopies.
The application for a Pag-IBIG home loan can take several months. However, once all requirements are met, the funds can be released in a matter of days or weeks.
Some factors have the potential to change this processing time. These include the following:
The usual procedures for evaluating a housing loan’s entire process are as follows:
The initial step in securing a housing loan involves pre-qualification and registration. It is advisable to check housing loan information online or visit the nearest Pag-IBIG office.
The housing loan application process usually takes 3 to 5 days to process successfully, but this may vary based on individual circumstances and document submission. Once the housing loan application is officially approved, an account number is assigned, and any remaining verifications are completed at that point.
Once your Pag-IBIG fund membership registration is confirmed, the next step is to submit the required documents to apply for a mortgage. These documents should include details about your address, utility bills, and government-issued identification documents showing your income.
If you’ve already begun the prequalification process, you can efficiently submit these loan documents either offline or online. This phase typically takes around 7 to 10 working days to process your documents, verify them, and grant approval for your loan application.
Your housing loan application is granted after it has been approved and validated, and no additional borrower documents are needed.
Upon formal loan approval, your funds are released within one to two days. Depending on your preference, you can verify your loan proceeds through the virtual Pag-IBIG platform or visit a nearby Pag-IBIG branch office.
The Pag-IBIG Fund Affordable Housing Loan is intended for low-income and minimum-wage members with monthly incomes of up to P15,000 in the NCR and P12,000 outside the NCR.
Under the loan program, Pag-IBIG Fund offers house loans up to P580,000 in socialized subdivision projects and exceptionally low rates for home loans up to P750,000 in socialized condominium projects at a subsidized rate of 3% annually.
People on minimum wage can use the Pag-IBIG Affordable Housing Loan to pay for any one of the following:
Also, you can use Pag-IBIG’s housing loan affordability calculator to see how much you can borrow depending on your income and selected repayment and fixing periods.
Repricing Period | New Interest Rate (%) | Previous Interest Rate (%) |
---|---|---|
1-year | 5.75 | 5.75 |
3-year | 6.25 | 6.375 |
5-year | 6.5 | 6.625 |
10-year | 7.125 | 7.375 |
15-year | 7.75 | 8 |
20-year | 8.5 | 8.625 |
25-year | 9.125 | 9.375 |
30-year | 9.75 |
Repricing Period: This column indicates the duration for which the interest rate is fixed before it can be repriced.
New Interest Rate (%): This column shows the new annual percentage rate that applies to Pag-IBIG Home Development Loans as of July 1.
Previous Interest Rate (%): This column displays the annual percentage rates that were in effect before the changes took place.
The Pag-IBIG Housing Loan now offers lower annual percentage rates, with reductions in various repricing periods ranging from 1 year to 30 years. The 1-year repricing period remains at 5.75%, while the 3-year repricing period has been reduced to 6.25% from 6.375%.
Similarly, interest rates for longer repricing periods have also been lowered, making housing loans more affordable for borrowers. Additionally, the special annual percentage rate for home loans of minimum-wage earners under the Affordable Housing Program remains at 3% per annum, which is the lowest available in the market. These changes aim to make homeownership more accessible and affordable for Filipinos.
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