Wednesday, April 3, 2024

Financing Your Home: Pag-IBIG vs Bank Loans

More OFW Updates

Seeking employment outside in the Philippines is both a blessing and a curse. Many of us find jobs abroad with a single purpose; to give our families a better life in the Philippines.

Being an OFW helps us to pay for expenses like school tuition, medicine, and other necessities. Such things provide our love ones’ more comfort. But they all come at the cost of us being away from them.

One of the things that OFWs try to save up for when the iron is still hot is a house. Having a home that we can call our own represents all our hardships that we went through while being abroad. For those of us who don’t have enough money to finance the construction of our dream house, we resort to borrowing money. The PAG-IBIG Housing Loan is one of the more popular options.

But here’s the thing, financing your first home through PAG IBIG is no different from a bank loan. Here is a complete comparison of the PAG IBIG Housing Loan compared to a Bank Loan and which will make you think twice.

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  1. Must be a member, and must have 24 monthly contributions to qualify. Members can pay 24 months in a lump sum

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    Not more than 65years old

  3. No existing multi-purpose loan in arrears

  4. No other PAG IBIG housing loan us that had been foreclosed, canceled or bought back

  1. No membership needed, no contributions required, no need to have a savings account

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    Must be a Filipino citizen, or have a Visa requirement for foreigners

  3. Must have a monthly family income of Php50,000.00

  4. Must have a stable source of income.

Loan Purposes

  1. It can be used to purchase a house and lot.

  2. Can be used to purchase townhouse or condominium

  3. Can be used to complete construction

  4. Re-financing

  1. Can be used to purchase a townhouse, condominium unit

  2. Can be used to finance house construction

  3. Can apply for re-financing

  4. Also, offer home equity service

Borrowing Limit

Maximum of Php 6,000,000.00

It offers a minimum of Php 500,000.00.

Loan Appraisal Value



Interest Rates

  1. 4.5% for loan of Php 400,000 provided monthly income is no lower than  Php 15,000.00 if living in the Metro or Php 12,000 if outside the Metro

  2. 6.5% for loan more than Php 400,000 provide monthly income is more than Php 17,500 if living in the Metro or Php Php 15,000 if living outside the Metro

  3. Fixed-rate for the first ten years, subject to re-pricing based on the prevailing interest rate or additional 2% whichever is lower

  1. Some banks offer as little as 5.50% for the first year, subject to re-pricing.

  2. Some banks offer a fixed rate of 7.5% for the first five years, also subject to re-pricing.

  3. Due to regular re-pricing, on 20th year, banks offer an average of 12% interest rate

Repayment Process

Maximum of 30 years

Ranges from 20-30 years


  1. Pag Ibig Housing Loan Application Form

  2. Membership Status Verification Slip

  3. TCT/CCT in the name of the borrower

  4. Photocopy of the New Tax Declaration

  5. Collection Servicing Agreement or Post-dated checks

  6. Proof of billing address

  7. Notarized Loan and Mortgage Agreement

  8. Notarized Promissory Note

  9. Disclosure Statement on Loan Transaction

  10. Occupancy Permit (if applicable)

  11. Building Plans (if applicable)

  12. Deed of Absolute Sale (if applicable)

  1. Application form

  2. Photocopy of government-issued ID with photo & signature

  3. Marriage contract if applicable

  4. Alien Certificate of Registration for foreigners

  5. ITR for employees

  6. Last three months of payslips or Certificate of employment for employees

  7. Business Registration Papers for businessmen

  8. Financial Statements  for businessmen

  9. Bank Statements for businessmen

  10. Trade References for businessmen

  11. Lease Contracts or copy of Title for businessmen

  12. Photocopy of TCT/CCT

  13. Building plan with vicinity map

  14. Master of Deed of Declaration of Restrictions for condominiums

  15. Building plan for construction

  16. Bill of materials and Labor Cost

  17. Statement of Account for Refinancing

Miscellaneous Fees

  1. Php 1,000 during loan application

  2. Php 2,000 before the release of loan

  1. Appraisal Fee of Php3,500 – Php 4,000.00

  2. Handling Fee of Php 5,000.00

  3. Notarial Fee of Php 500

  4. Registration Fee

  5. Doc Stamps Tax

Insurance Needed


  1. MRI or Mortgage Redemption Insurance in the case of death before the full payment of the loan

  2. Fire Insurance

Processing Time

15-30  Business Days

5 – 7 business days

Obtaining a loan via PAG-IBIG is one of the best deals out there if you plan to get a property worth not more than six million pesos. This is also assuming you are going to pay it within ten years. But if you want a more significant loan amount and a little more safety concerning the interest rate being locked up for more than ten years, you should choose a bank to loan the amount. Choose wisely, fellow OFWs!

Source: Sil Silvestre of iMoney Philippines

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  1. Good afternoon po,paano ba mag join sa inyong Modified Pag ibig 2 program nandito kasi ako ngayon sa Jeddah last 2013 nagfile po ako ng self paying pero diko nakuha ang aking selfpaying ID number gusto ko po sanang magjoin sa Modified Pag ibig 2 program paki reply nalang po sa aking smart roaming number,+639202988432 maraming salamat po.

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