Pag-IBIG Financing vs Bank Financing — A Mortgage Loan Comparison

Do you have any idea how much is the going rate of the Home Loan Program offered by your favorite bank?

As a home buyer, one of the first steps you should take before starting the legwork of searching for your home is to get to know the interest rates currently available in the market. That is, shop for the best home loan first, and then shop for the house.

If you have been visiting this website for quite a while, you should already know the interest rates of a Pag-IBIG Housing Loan.

Did you make any comparison of Pag-IBIG Housing Loan versus the competing Bank Housing Loan? You should. Just because you are a member of the Pag-IBIG Fund doesn’t always mean that it’s the only option you have when financing your home purchase. The banks may offer an even better alternative mortgage loan that really fits your needs.

When it comes to Housing Loans at larger amounts, most banks in the Philippines offer almost the same interest rates as those of the Pag-IBIG Fund. As a matter of fact, banks are even more competitive that most high-end buyers are using them to save on a lot of hassle involved with getting a Pag-IBIG Housing Loan. If that’s the case, why should you even bother getting a Housing Loan from Pag-IBIG?

One site visitor has a keen observation on this matter and she dropped a message that read in part:

Pag-IBIG Financing versus Bank Financing

“What is the advantage of choosing PAGIBIG over banks? I’m looking at the interest and they are almost identical. Your answer might help me choose the lender for my property.”

In this article, we’ll compare the two financing options citing the advantages and the disadvantages of each.


A Pag-IBIG Housing Loan is only available to Pag-IBIG Fund members. That’s the basic requirement and yet that’s also one of the main reasons most Filipinos can’t get access to the housing loan with the Pag-IBIG Fund. If your membership record with the Pag-IBIG Fund is not very impressive, your loan application may also be affected.

Getting a mortgage loan from a bank, however, doesn’t require any membership at all. You don’t even have to be a depositor at the bank to be considered a housing loan applicant. You can be a depositor at any bank and then apply for the competing bank and you are free to choose which one you think offers the best loan.

(See also : How To Check If You Are Qualified For A Pag-IBIG Housing Loan )

Income Requirements

You are probably aware that a member’s loan amount entitlement has a lot to do with his level of income. Luckily, you don’t have to guess anymore to see which loan amount you can possibly get given your current income. Please check our article that discusses the Income and Loan Entitlement and see which loan bracket you are at.

(See: What to do if you are denied a Pag-IBIG Housing Loan?)

Loan Amount

The minimum loan amount that you may be granted with a Pag-IBIG Housing Loan is P 100k. The maximum is only P 3M – so if your project costs more than that and you are to finance it with Pag-IBIG Housing Loan, don’t even bother getting a Pag-IBIG Housing Loan.

Unlike the Pag-IBIG Fund, a lot of banks will only entertain you if you are loaning at least P 800k for a housing loan. At the flip side, a bank will also not give you a ceiling on the amount of loan that you can take as long as you are capable of paying for the loan and you are not really a risky borrower based on their assessment of your financial documents.

Banks have their qualifying parameters too that they use when evaluating a loan application. And it varies from one bank to another. As a general rule, your gross income should be at least three times greater than your monthly amortization for you to have a good chance of getting the money. You’ll be asked to fill up a detailed Financial Information Sheet and always expect them to verify the accuracy of whatever you put there.

Loan Term

This is perhaps the biggest reason why Pag-IBIG Financing is so popular. A Pag-IBIG Housing Loan is noted for offering a long term loan of 20 to 30 years!

On the average, a bank can offer between 5 to 10 years on their housing loan clients. A 20-year loan is very rare with them.


“Bank Financing Vs Pag-Ibig Financing — A Mortgage Loan Comparison” is written by Carlos Velasco.

  • sansukini

    Tie-up with the developer usually pag 20 years ang term ng bank. I think, it all depends on how much your loan will be. Pag kasi yung mga expensive houses, it’s really so much better to go with bank financing kasi mas maliit ang interest. Pag naman less than 1M yung loan, PAG-IBIG talaga dapat.

  • admin

    I highly appreciate your inputs on this matter.

  • loaner

    Hi Admin,

    May nakuha kasi akong row house sa Sta Rosa last 2009 thru a developer with equity na hinulugan ko ng 1 year(2010). Natapos lang ang construction ng unit this year 2011 at na-release ang Pag-ibig Housing Loan ko last June 2011. Three Months na rin akong naghuhulog thru PDCs na sinubmit ko sa developer. Di ko pa natitirhan ang bahay at di ko pa rin naaaccept. Sa ngayon nagdadalawang isip na akong tirahan ang bahay at nagiisip na i-withdraw na lang. Di rin ako nagandahan sa pagkakagawa ng bahay. Ano kaya ang magandang gawin? Ano ang maipapayo mo sa sitwasyon ko. Maraming salamat sa pag-sagot.

  • dexter

    admin; ngpa authenticate po ako ng certificate of employment ko d2 phil embassy d2 oman..sabi ng SPA ko sa dec 2011 na daw mglapse, hnde ko pa ma eaply sa pg ibig un kinuha ko house and lot kc na delayed ang construction nla, dapat by dec tpos na un house, iniform na sa feb 2012 pa daw matatapos..pwede ho ba ang certificate of employment ko na papagawa ko ulit eh dna authenticated sa phil embassy?pero my seal po ng company saan ako ngwowork..

  • admin

    Ideally, you should submit the latest document. But it depends on the branch if they will accept that considering your case. If you were in your case, I have that authenticated after making sure that the house will be finished on the agreed date.

    You can complain about it at the office of the developer.

  • peachy

    hi admin! I have a developer and i am starting to pay for my equity. Start pa lang eh, sinabi na nila na I am qualified sa pag-ibig. now, they inform na hindi daw pasok yung income ko (NDI)kung kelan ililipat ko na sa pag-ibig. at gusto nila ay ilipat ako sa mas mababang unit. natural po ayaw ko naman lumipat ng unit. actually sinabi po sa akin na mag co-borrower ang problem wala naman may pag-ibig member bukod sa akin. ang sa akin po ay nakakahulog naman ako, ang totoo nga eh, ang monthly ko sa equity ay nasa 12k. anu po ba pede ko gawin dito?

  • rowena llanes

    admin,gusto ko na rin magkaroon sana ng bahay at pag-ibig lng ang pwede kong lapitan,gusto ko sanang mag file ng loan after 2 yrs,nsa 11,ooo lng ang sahod ko dito sa kuwait at ng rerent lang sa baguio ng 3000/mo ,meron ba kayong available na housing na pwede ng tirahan tapos hulugan ko buwan-buwan,preferably sa baguio city sana,ka me member ko lng and i’m willing
    to complete my full contribution sa pag-ibig
    please help
    thank you

  • admin

    You have fallen into a very common trick. Please consider the tips
    cited at this article:

    Please check it in Baguio area.

  • gracie

    hello admin..just want to ask if pwed i reloan namin ung bahay sa inyo kahit naka mortgage ito sa ibang banko..ung bahay ay hindi pa nakapangalan sa amin ang title pero tinuloy namin ang payment under sa name pa rin ng may ari but we have kasulatan about this matter so ang gusto namin is i reloan namin sa pag ibig under our name kung papayag ang bank na i reloan namin…what do you think are the process that will be done about our this possible?

  • gracie

    i reloan namin after naitransfer na ang title

  • randy

    admin, ofw po ako dito sa africa, bale direct hire na po ako as i have been working here for the last 13 years since 1998. i became a voluntary paying member since 2007 and been paying my cintributions up to date. i have a 132 sqm lot in makati city which is under my name. i intend to build a 3 storey building for rent and i have half of the cost covered and want half to be finance by pagibig. my question is this, can i apply for a housing loan thru my father which is also a pagibig member? i only have a month of vacation every year which i think is not enough to complete all the requirements. i am looking forward for kind attention and best advise on my situation. maraming salamat po.

  • Rowena Okazaki

    I have a condo unit wich is located at Mandaluyong City, California Garden Square, I want to sell or iloan ang condo unit as soon as possible, pero ano po ang dapat kung gawin para mailoan ko po ang property? I bought the property 2.5 M, last 4 years. This year 2011, the property can be sell 3.4M and something. How much can I possibly sell the property if ever the bank could buy the property? Or di po ba bumibili ng property ang PAG IBIG fund? If its not, how much can I loan the property? I hope you can reply to my message. Thank you.

  • admin

    Please realize that Pag-IBIG or any bank for that matter is not in the business of buying properties. Their main business is lending money for housing projects.

    It would be easier if you apply for the loan yourself since you are also a member.

    Your case sounds very complicated and naturally Pag-IBIG would automatically reject this kind of transaction.

  • Pastor Reyes

    Good Day PO MR Admi

    Ang isa po pala na mahalangang kailangan para sa House and Lot Loan ay TCT

    ang problem ko po now ay matapos po na mabayaran ang Equity ay duon lang po namain nalaman sa developer namin na 8 bago irelis ang Original TCT.May tanong po ano po kayang paraan ang dapat kung gawin para maka pag avail ng housing loan na wala pa ang original TCT? maraming salamat po.

  • jeffreyquimson


    I want to apply for purchase of house and lot. How long it usually takes to get the loan? Net salary is 28,000 pesos and current contribution is at 500 pesos / month. The owner of the property is my aunt and actual price of that is 1.5M to 2M. Can you please give me an idea on what to do?


  • admin

    If you’re lucky, you can get the loan within 2 months maximum. It would help if you also read this article to know about the loan amount you can possibly get.

    I think you can use the In-House financing option if your developer is offering that one. Please check with them. Both banks and Pag-IBIG require the Land Title.

  • Alfredo V. Sulla

    Gud pm po ADMIN,

    Inquire ko lang po regarding financing loan,kasi mayrun akong housing loan thru SSS,ang problem ko foreclosed na house ko last July 2011 kasi almost 1 year na ko d nkakapag bayad ngamortization.Member po ako PAG-IBIG for almost 20 years.Qualified po ba ako mag loan sa PAG-IBIG?Ang Basic salary ko 25,000 + allow 4,000…..mga magkano po ma lo loan ko and how long po processing?Ano po mga requirements needed?

    Thanks po,

  • Paul

    Dear Admin,

    Good day!

    I am currently working in Singapore po.. and Patapos na ako sa Down payment ng kinuha kong house and lot sa Pinas. Balak ko po sana mag apply sa pag-ibig to pay my remaining balance na(Php 1.7M). at masimulan na ang construction ng house.

    I asked the developer, pipoproposed nila ang bank financing..
    Anu po ang ma advise nyo kc gusto ko sana through pag ibig?
    Ganu po kabilis ang approval ng pag ibig?

    Thank you.

  • Chuck


    I would like to ask if its possible na bilhin ko yung house and lot under my father’s name. Meron kasi house and lot na binebenta dito samin but the owner doesnt want to use her title as a collateral. My plan is to buy our house and transfer it under my name and use the money that i’ll get from pag ibig to to buy that property. Please reply. Thank you in advance.


  • admin

    It doesn’t work that way.

    If you are asking for help on the loan, I think your developer should be able to assist you on that one. Please consult them first.

  • kate

    hello po good day…

    Im thinking po to loan,housing loan,multipurpose loan sa pag ibig fund they can give it po ba ng cash?kc my hinuhulugan an po un mother ko na lupa so plan ko po to continue that at para po un cash e dun sa house din para sa design na gusto and mas mka save,i dont have any idea po about housing loan,1st time ko po naging interested,the earlier the better,im 25 yrs old po and gusto ko dn po malamn gaano po katagal ma approv kung babayaran ko lan po un 2yrs ko na membership since hindi po tlga ako active,—OFW in HK.