Is a Pag-IBIG Housing Loan the Best for Me?

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Is a Pag ibig Housing Loan the Best for Me?

Is a Pag-IBIG Housing Loan the Best for Me?

Denise S. – Aug 18, 2022

What is Pag-IBIG?

Originally established in 1978, the Home Development Mutual Fund or Pag-IBIG fund is the government’s solution to providing Filipinos with a national savings program and affordable housing loans. As of 2010, the government has made membership in Pag-IBIG a requirement for the following individuals:

● All employees, workers, professionals, officers, and companies who are compulsorily covered by the SSS and GSIS
● Uniformed members of the Armed Forces of the Philippines, the Bureau of Fire Protection, the Bureau of Jail Management and Penology, and the Philippine National Police
● All members of the judiciary and constitutional commissions
● Overseas Filipino Workers (OFWs)
● Filipinos employed by foreign-based employers, whether deployed locally or abroad

By being a Pag-IBIG member, you are expected to contribute a minimum of P100 to the fund. If you are locally employed, P100 will automatically be remitted to Pag-IBIG by your employer. However, if you are self-employed or an OFW, you must apply for membership manually online or at any Pag-IBIG branch.

Additionally, it is also possible to contribute more than P100! The more money you contribute, the higher dividends you’ll earn. Pag-IBIG distributes 70% of its net income to members as dividends.

What is the Pag IBIG Housing Loan?

Pag-IBIG offers affordable housing loans for its members, whether you're looking to buy a condo, house and lot townhouse, or need to complete a housing loan application for any other purpose.

With the Pag-IBIG housing loan, you can buy a residential house and lot not more than 1,000 sqm, townhouse or condominium unit. Besides this, it is also possible to construct or renovate a home.

The amount you can borrow depends on the lowest of the following factors:
● Your actual need;
● Your desired loan amount;
● Your loanable amount is based on your capacity to pay; and,
● Loan-to-Appraised Value ratio

What are the Terms of the Pag IBIG Housing Loan?

You are only allowed to borrow a maximum of 6 million pesos and have up to 30 years to repay your loan.

Repayment can be done through a number of methods such as:

● A collection servicing arrangement with your employer who will remit your payment to Pag-IBIG.
● Issuance of post-dated checks;
● Auto-Debit Arrangement (ADA) with a Pag-IBIG Fund partner-bank
● Online via Virtual Pag-IBIG
● Online via payment channels
● Visiting your nearest Pag-IBIG branch

Who is Eligible for the Pag IBIG Housing Loan?

Members who satisfy the conditions below may complete the requirements for pag-ibig housing loan and apply:
● Active member with at least 24 months of savings
● Not more than 65 years old at the date of loan application and not more than 70 years old at the date of loan maturity
● Legal capacity to acquire and encumber real property
● No Pag-IBIG housing loan foreclosed, canceled, bought back, or voluntarily surrendered
● If with an existing Pag IBIG Housing loan account or Short Term Loan (STL), payments must be updated

Fixing Term	Interest Rate
1-Year Fixing	5.750 %
3-Year Fixing	6.375 %
5-Year Fixing	6.625 %
10-Year Fixing	7.375 %
15-Year Fixing	8.000 %
20-Year Fixing	8.625 %
25-Year Fixing	9.375 %
30-Year Fixing	10.000 %

Which Should You Choose?

Applying for a Pag ibig housing loan may seem like the best option, given that its very purpose is to provide affordable housing. But before making this decision, it is important to consider whether the Pag IBIG housing loan is what’s best for you, depending on your lifestyle, income, and long-term goals. Besides Pag-IBIG, many of the major Philippine banks offer home loans which give you the freedom to compare and contrast these options. In short, you can shop around before making a final decision.

This is where Nook comes in. With Nook, you no longer need to travel back and forth between banks searching for the perfect home loan. Instead, we’ll match you with the right home loan you need. Nook will also handle the entire home loan application process and keep you constantly updated on your progress.

Finding the right home loan that fits your circumstances is the first step toward finally owning the dream home you’ve always wanted. Schedule a free call with our home loan consultants or even use our pre-qualification tool to make your home-owning dreams come true.

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