Pag-ibig Housing Loan

[wow_gorgeous]

thanks for the information neo at paolorenzo interesting... super excited na ako sa house... sana naman this year makapag-start na kami...

[garckerr]

HSBC offers the lowest at 5.75% per annum, annual repricing.

But the thing with annual repricing, it might bite you if economy goes down. But im quite optimistic that the current administration will uplift the economy, so im staying with 1 yr repricing.

What i got was a bit different , but also from HSBC , with 3.99% for dollar denomination.

[purplemommy]

from what I heard, Chinabank is one of the banks na ok mag-loan.. i'll file one soon. ang 5 years nila is I think 8.25% or 8.75%.... iniintay ko lang BOMs ko from my architect.

[wow_gorgeous]

HSBC offers the lowest at 5.75% per annum, annual repricing.

But the thing with annual repricing, it might bite you if economy goes down. But im quite optimistic that the current administration will uplift the economy, so im staying with 1 yr repricing.

What i got was a bit different , but also from HSBC , with 3.99% for dollar denomination.

ah really... does hsbc offer housing loans as well?

[wow_gorgeous]

i just checked out their website.. they do thanks garckerr... will read on the info thanks again!

[NeoAnderson88]

i just checked out their website.. they do thanks garckerr... will read on the info thanks again!

i used to have an account with hsbc. our corporate accounts are with hsbc as well, thus i still transact with them. tapat lang ng office ko. they also offered me a housing loan. but metrobank/ucpb/bdo are the tie up banks of my developer. and i prefer the 3-year repricing. mataas kasi sa hsbc. the best lang sila sa 1-year repricing. knowing hsbc, na lahat yata ay may charges (over the counter deposits, OTC withdrawals, etc) baka bawiin naman nila the following years. i just don't want to take the risk with hsbc. just my personal opinion.

but i still called up a lot of commercial banks just to compare the rates at different repricing terms. fortunately, my developer's tie up bank, metrobank, has the lowest interest rate at 3-year reprcing.

i think east west is also offering a very low interest rate at 1 year repricing.

[wow_gorgeous]

ah i see... thanks again for the input neo... will definitely check on the repricing.... pati sa pagibig...

actually wala ako idea about repricing eh... sabi lang sa eastwest eh fixed daw yun for yung kunyari 15 years

[hotryder]

Hi All,

Since we're on the topic of repricing, I'd like to discuss this futher. Naguguluhan na kasi ako talaga kung ilang years ko ififix. Actually, 2 na lang options ko. Either fixed 5 years at 9% or fixed 10 years at 10%. I'm leaning on the 10%, 10 years fixed. Loan term ko pala is 15 years. Mas mataas talaga ang 10 years fixed pero peace of mind na binabayaran dito. Di naman sa walang tiwala ako sa economy ng Pinas, just want to be sure. Di ko kasi afford ang pagtaas ng interest rate, sagad na with the projected monthly amortization.

[wow_gorgeous]

hptryder: onga.. ako din eh.. parang mas ok na fixed na for the entire term... medyo mahirap na baka sumobrang taas naman, eh planado na yung mga expenses diba... as if tataas din ng malaki ang sweldo kung sakali...

[garckerr]

Here's my 2 cents:

I strongly disagree about the speculation na "baka tataas" mentality

If you do your research properly

For decades, ever since banks in the Philippines offered home loan mortgages. The interest rates has been steadily declining. Did you ever heard your older generation says, I use to pay 20+% interest in home loan, and it was fixed for 20 years. etc,

Few years ago it was at 15%, then it went to 13, 12, 11.5, now you can get yearly repricing at an average of 9+%

I believe that the home loan interest here in Philippines will steadily decline , that's why i dont buy those "FIXED RATE for # of years"

If you look at our neighboring countries , their interest rate are way below PH, some have 5%, some 3%, some even 1%.

If you also look at the mentality of this neighboring countries, for example India, or Indonesia - most borrowers prefer the annual repricing than the fixed term, because they believe that their economy is getting better.

Philippine economy has been slump for decades and now its starting to improve, with GDP last year at near all time high, we expect these interest rates to go down. That is why banks are quite optimistic offering these 5+% first year interest, because they do expect things to get better in this country.

[garckerr]

Oh yeah, I currently have a home loan annual repricing for 20 years.

[hotryder]

Thanks for your input garckerr. It really depends on the risk appetite of the individual. For example, I'm risk averse. I'm newly married and the amortizations would eat up half of my income. I can't afford changes in the interest rate. You on the other hand, can afford to take in risks. which is why I'll choose the 10% fixed for 10 years. You can also say that I'm paying premium for peace of mind.

If you don't mind, how much, what bank and what year are you in your amortization? Thanks.

[NeoAnderson88]

Here's my 2 cents:

I strongly disagree about the speculation na "baka tataas" mentality

If you do your research properly

For decades, ever since banks in the Philippines offered home loan mortgages. The interest rates has been steadily declining. Did you ever heard your older generation says, I use to pay 20+% interest in home loan, and it was fixed for 20 years. etc,

Few years ago it was at 15%, then it went to 13, 12, 11.5, now you can get yearly repricing at an average of 9+%

I believe that the home loan interest here in Philippines will steadily decline , that's why i dont buy those "FIXED RATE for # of years"

If you look at our neighboring countries , their interest rate are way below PH, some have 5%, some 3%, some even 1%.

If you also look at the mentality of this neighboring countries, for example India, or Indonesia - most borrowers prefer the annual repricing than the fixed term, because they believe that their economy is getting better.

Philippine economy has been slump for decades and now its starting to improve, with GDP last year at near all time high, we expect these interest rates to go down. That is why banks are quite optimistic offering these 5+% first year interest, because they do expect things to get better in this country.

Thanks for your input garckerr. It really depends on the risk appetite of the individual. For example, I'm risk averse. I'm newly married and the amortizations would eat up half of my income. I can't afford changes in the interest rate. You on the other hand, can afford to take in risks. which is why I'll choose the 10% fixed for 10 years. You can also say that I'm paying premium for peace of mind.

garckerr has raised some very valid points. And his inputs are very much appreciated. However, a lot of Filipinos are very much like you hotryder. They prefer having a peace of mind.

Most of the homebuyers in my village opted for fixed interest rate for the entire duration of their loan payment term (i.e. 10, 15, 20, 25 years). Their reason is basically the same - peace of mind. I think, I am the only one that I know of who opted for a 3-year repricing for a 15-year loan term, at 7.75% interest rate. In my opinion this is a bit safe. IF (only IF) interest rates go up after 3 years, I may have to transfer the loan to Pag-IBIG, assuming my remaining principal qualifies me to the lower Pag-IBIG interest rates. If interest rates go down after 3 years, then good for me. But for the next 3 years, I have my own peace of mind.

Last year, BDO was offering me 7.88% for the 3-year repricing. This year, their rate for the same period has already gone up. But Metrobank's remain the same. I don't know the basis of BDO for their rate increase for 2011.

Pag-IBIG is also more lenient to delinquent payments. This is another reason why many homebuyers prefer Pag-IBIG financing.

One time in my developer's sales office, one homeowner missed 4 straight payments to Metrobank due to financial problems. Metrobank was already processing the foreclosure of her house.

With Pag-IBIG, if one does not pay his monthly loan amortization for a year or several years, it just earns interests and penalties, but the house remains with the homebuyer. There just might be a loan restructuring. Sometimes, even the penalties are waived. There's even a discount for advance payments. And there is a grace period for payments.

I guess, many averaged income Filipinos are still worried of job security also which equates to capacity to pay the loan. I admit, I myself is worried of this. But having his/her own house and lot is one of the many dreams of many middle-income Filipinos. Though a 3-million house and lot is still considered low cost housing, this is still out of reach for many Filipinos.

Also, I admit that the economy seems getting better. But for many Filipinos who have seen the country's economic slump for the past many years, the signs that the economy is improving are not clearly felt.

[paolorenzo]

Yung house namin is under PSBank, 10-year loan, rate fixed for the 1st 5 years, at 10.5%. Malapit na yung 5th year ko, so I'm also thinking of what to do with the remainder of the loan. Current rate raw is 9.5%.

Like the typical Filipino, I might fix the remainder of the loan to the current rate. At least panalo na ako sa 1% decrease in interest. And I am fortunate enough that I'm earning more today, than 5 years ago when I signed up for the loan.

Transferring the balance to another bank or Pag-Ibig will be a whole new set of headaches para sa akin. And the way the bank structures the loan, the early years are allocated more to pay interest, with the latter years allocated to the premium. So kahit na halfway ka na sa loan term, it doesn't necessarily mean that half of the loan is already paid. Daya talaga nang bangko. But I signed the dotted line, after reading the fine print. So I really can't complain.

[purplemommy]

ako naman, i plan to have it fixed only up to 5years muna, for the reason na gusto ko muna ma-fix ang "budgeting" ko for the housing loan... i don't know if this makes sense, pag-aaralan ko pa rin muna.

[NeoAnderson88]

Yung house namin is under PSBank, 10-year loan, rate fixed for the 1st 5 years, at 10.5%. Malapit na yung 5th year ko, so I'm also thinking of what to do with the remainder of the loan. Current rate raw is 9.5%.

Like the typical Filipino, I might fix the remainder of the loan to the current rate. At least panalo na ako sa 1% decrease in interest. And I am fortunate enough that I'm earning more today, than 5 years ago when I signed up for the loan.

Transferring the balance to another bank or Pag-Ibig will be a whole new set of headaches para sa akin. And the way the bank structures the loan, the early years are allocated more to pay interest, with the latter years allocated to the premium. So kahit na halfway ka na sa loan term, it doesn't necessarily mean that half of the loan is already paid. Daya talaga nang bangko. But I signed the dotted line, after reading the fine print. So I really can't complain.

PSB is actually one of the banks (if not the lowest) that has the low fixed interest rates for long term loan. Ok ang PSB. Yung mga friends ko sa PSB nakaloan, kasi yun ang tie up bank ng developer nila.

Yep. Yun lang ang bad trip sa computation. Yung mga unang payments, sa interest muna.

Citibank naman offered me a loan 8.16% interest payable up to 5 years (pero 3 years lang ang kinuha ko). Mababa na. Kinuha ko na for the home renovation. No processing fees. No hidden charges.

[purplemommy]

^BPI and Chinabank lang ako nakapag-inquire... parang mas gusto ko mag-submit sa Chinabank, mas mababa ang interest rate nila. ok rin sa PSB? mabilis ba approval nila? magkano ang appraisal fee? sa chinabank kasi P1,500 lang, sa BPI naman P3k ata or P3,500.

[hotryder]

Pag-IBIG is also more lenient to delinquent payments. This is another reason why many homebuyers prefer Pag-IBIG financing.

One time in my developer's sales office, one homeowner missed 4 straight payments to Metrobank due to financial problems. Metrobank was already processing the foreclosure of her house.

With Pag-IBIG, if one does not pay his monthly loan amortization for a year or several years, it just earns interests and penalties, but the house remains with the homebuyer. There just might be a loan restructuring. Sometimes, even the penalties are waived. There's even a discount for advance payments. And there is a grace period for payments.

I initially wanted to go with Pag-ibig, for the reasons you mentioned above. Pag-ibig is somewhat service-oriented while banks just want to earn. Fear of foreclosure is why I wanted to go with Pag-ibig. However, their rates depend on the amount of the loan, not the term. The higher the amount, the higher the interest. And the developer has pending requirements with Pag-ibig so I went with PSBank instead.

PSB is actually one of the banks (if not the lowest) that has the low fixed interest rates for long term loan. Ok ang PSB. Yung mga friends ko sa PSB nakaloan, kasi yun ang tie up bank ng developer nila.

Yep. Yun lang ang bad trip sa computation. Yung mga unang payments, sa interest muna.

Citibank naman offered me a loan 8.16% interest payable up to 5 years (pero 3 years lang ang kinuha ko). Mababa na. Kinuha ko na for the home renovation. No processing fees. No hidden charges.

Wow, that's low. Did they offer up to 10 years fixed? HSBC only allows fixing for 5 years at 8.99%.

^BPI and Chinabank lang ako nakapag-inquire... parang mas gusto ko mag-submit sa Chinabank, mas mababa ang interest rate nila. ok rin sa PSB? mabilis ba approval nila? magkano ang appraisal fee? sa chinabank kasi P1,500 lang, sa BPI naman P3k ata or P3,500.

PSBank takes 5 days to give you approval, provided that documents are complete. Appraisal fee is 3.5k, but waived if there is a tie up with the developer. I have finally decided to go with PSBank, 15 year term, 10% fixed for 10 years. I can't really say if this is the best decision financially since we can't predict interest rates. Anyway, Chinabank has the low rates for accredited developers.

[NeoAnderson88]

I initially wanted to go with Pag-ibig, for the reasons you mentioned above. Pag-ibig is somewhat service-oriented while banks just want to earn. Fear of foreclosure is why I wanted to go with Pag-ibig. However, their rates depend on the amount of the loan, not the term. The higher the amount, the higher the interest. And the developer has pending requirements with Pag-ibig so I went with PSBank instead.

Yep. That's why I didn't go for Pag-IBIG as my loan would fall under 10.5%.

Pag-IBIG has become very strict and meticulous in approving loans. Even my developer has been having a difficult time complying with Pag-IBIG's requirements and is now promoting bank financing.

Pag-IBIG interest rates per annum are as follows for the following loan amounts in Philippine pesos:

50,000-400,000 --> 6%
450,000-750,000 --> 7%
800,000-1,000,000 --> 8.5%
1,050,000-1,250,000 --> 9.5%
1,300,000-2,000,000 --> 10.5%
2,050,000-3,000,000--> 11.5%

Prevailing banking interest rates is also a factor. If I remember correctly from the seminar, Pag-IBIG's maximum interest rate is at 12.5%

House and Lots worth 3 million pesos, apparently, are still categorized as low cost housing.

Citibank naman offered me a loan 8.16% interest payable up to 5 years (pero 3 years lang ang kinuha ko). Mababa na. Kinuha ko na for the home renovation. No processing fees. No hidden charges.

Wow, that's low. Did they offer up to 10 years fixed? HSBC only allows fixing for 5 years at 8.99%.

Citibank's Call-for-Cash is a seasonal promo that is only offered to select credit card holders with excellent record. They've been calling me for years but I didn't need it before. The payment term is only up to 5 years. Actually for a 1-year payment term, the interest offered to me was only 0.39% per month or 4.68% for the year. But there's an availment fee of PHP3,000 for the 1-year term.

PSBank takes 5 days to give you approval, provided that documents are complete. Appraisal fee is 3.5k, but waived if there is a tie up with the developer. I have finally decided to go with PSBank, 15 year term, 10% fixed for 10 years. I can't really say if this is the best decision financially since we can't predict interest rates. Anyway, Chinabank has the low rates for accredited developers.

At least you'd have your peace of mind. In my case, my 4th to 15th year, I'd continually hoping and praying that the economy doesn't get worse and that interest rates would not go up.

[hulikaw2000]

One thing I personally like with the Pagibig loan is that I can make balloon payments wherein I can shorten my payment period without penalty. Is there any bank that offers the same scheme?