Just as buying a house is one of the most important investments for anyone, it can also be the most expensive investment you’ll ever make. This is because, in the Philippines, real estate property prices can go as high as millions of pesos. Since not everyone is financially able to pay for their home in advance, others tend to obtain home finance from various sources.

This is why Filipinos resort to housing loans to finance their new home without breaching their budget. Depending on the need and financial ability, there are 4 different types of housing loans available in the Philippines for you.

1. In-house Financing

Residential developers in the Philippines offer in-house financing schemes. This scheme is developed for those buyers who chose to pay for their properties in installments. Moreover, it can be tailored-fit to the financial capacity of their clients. The advantage of availing this is that you don’t have to undergo a lot of paperwork and background checks because the developer already has that when purchasing their property. Basically, it is just like paying in staggered payments but, of course, with interest.

The interest rate could be really heavy as it could amount to as high as 18%. However, you should also keep in mind that the shorter the loan term, the lower your interest rate will be. So, before availing of this, make sure that you have planned out your finances properly.

2. Bank Housing Loans

There are housing loans offered by commercial banks that you can go for. As a matter of fact, this has been a pretty popular choice, for they usually come with lower interest rates, and the terms are really flexible.

There are typical qualifications from different banks. However, the interest rates, conditions, and requirements could vary. This is why it is important to get pre-qualified before opting for a housing loan.

One way to get a higher chance of qualifying is by not tarnishing your credit history before sending your application. Moreover, these banks usually offer housing loans for up to 25 years, and interest rates can be between 4.99% to 7.75% depending on the bank.

3. Pag-IBIG Housing Loans

This type of housing loan is a government’s provident fund to help Filipinos purchase their own home. Also, the Pag-IBIG loans can be used for repairs, reconstruction, or even buying a pre-owned house or condominium unit.

The maximum amount that you can borrow from Pag-IBIG is Php 6 Million. But, this is subject to specific terms and conditions. Not all can get that amount as it will still depend on the member’s capacity to pay and actual need. The interest rate will also rely on the amount that you loan, but it will not exceed 11% per annum.

4. SSS Housing Loans

The Social Security System or SSS is the state-run social insurance program for non-government employees in the Philippines. Furthermore, it also offers housing loans that cater mostly to Filipinos who are working overseas. The goal is to provide OFWs with low-cost housing. In addition, they could also opt for loans that can be used for house construction.

The tenure of the SSS housing loan can be up to a maximum of 30 years, and the interest rate can be between 7.5% to 11%. Moreover, the maximum loanable amount is Php 2 Million.

Something to Ponder on

We know how hard you have worked just to get your dream house. This is why we hope that this article has helped you understand your options when it comes to house financing!

Want to know your loan options? Read ”6 Loan Options To Consider During COVID 19 Crisis” to learn more.