Figuring out your monthly amortization before you sign any loan documents is one of the smartest moves you can make as a Filipino homebuyer or homeowner. A BDO housing loan computation lets you see exactly how much of your monthly payment goes to principal, how much goes to interest, and how the numbers shift when your fixed-rate period ends. Whether you are buying a ready-for-occupancy unit, refinancing an existing loan, or tapping your home equity, understanding the math puts you in control of your finances.
In this guide we walk through the formula BDO uses to compute monthly amortization, provide sample computation tables for common loan amounts, explain how the 1-year fixed rate of 6.00% p.a. works in practice, and answer the most common questions Filipino borrowers ask before applying. If you want to run your own numbers instantly, try the BDO Housing Loan Calculator 2026 or compare BDO rates side-by-side with other Philippine banks. Note that all interest rates cited in this page are subject to change — always confirm the latest rates directly with BDO or through Nook before making financial decisions.
BDO uses the standard reducing-balance amortization formula to compute your monthly payment. The formula is:
M = P × [r(1+r)^n] ÷ [(1+r)^n − 1]
Where:
- M = monthly amortization
- P = principal loan amount
- r = monthly interest rate (annual rate ÷ 12)
- n = total number of monthly payments (loan term in years × 12)
For example, if your annual interest rate is 6.00%, your monthly rate (r) is 6.00% ÷ 12 = 0.50% or 0.005. On a 20-year loan, n = 240 payments. This formula ensures that each monthly payment covers both accrued interest and a portion of the outstanding principal, so your balance reduces every month.
Because BDO uses a reducing-balance method rather than a flat-rate method, the peso interest you pay each month decreases over time as your principal shrinks — meaning more of each payment goes toward principal as the loan matures.
As of 2026, BDO Unibank — a Nook partner bank — offers a 1-year fixed interest rate of 6.00% per annum on housing loans, including refinancing. This rate applies to the fixed-rate period chosen at loan origination. BDO also offers a Home Equity product at 6.00% p.a.
After the fixed period expires, the rate reprices to a prevailing market rate which may be higher or lower depending on benchmark rates at that time. This is why it is important to understand what your computation looks like not only during the fixed period but also in the repricing scenario.
Compared to what most Filipino homeowners are currently paying — typically between 7% and 10% p.a. — BDO's 6.00% rate represents a meaningful reduction in monthly costs. For context, you can compare BDO's rate with other Philippine banks to see how it stacks up across the market. Please verify rates directly with BDO or through Nook before applying, as rates are subject to change.
Here is a worked example using BDO's 1-year fixed rate of 6.00% p.a. on a loan amount of 2,000,000 pesos:
Loan Amount: 2,000,000
Annual Interest Rate: 6.00%
Monthly Rate (r): 0.005
Loan Term: 20 years (n = 240 payments)
Monthly Amortization = 2,000,000 × [0.005 × (1.005)^240] ÷ [(1.005)^240 − 1]
(1.005)^240 ≈ 3.3102
Numerator: 0.005 × 3.3102 = 0.016551
Denominator: 3.3102 − 1 = 2.3102
Payment factor: 0.016551 ÷ 2.3102 ≈ 0.007164
Monthly Amortization ≈ 14,328
Here is how the same loan compares across different terms:
| Loan Amount | Rate | Term | Est. Monthly Amortization |
|---|---|---|---|
| 2,000,000 | 6.00% | 10 years | 22,204 |
| 2,000,000 | 6.00% | 15 years | 16,882 |
| 2,000,000 | 6.00% | 20 years | 14,328 |
| 2,000,000 | 6.00% | 25 years | 12,887 |
As the table shows, extending your loan term reduces your monthly amortization but significantly increases the total interest you pay over the life of the loan. Choose a term that balances affordability today with overall cost efficiency.
The fixed-rate period is the span of time during which your interest rate — and therefore your monthly amortization — stays constant regardless of movements in market interest rates. BDO currently offers a 1-year fixed period at 6.00% p.a.
During the fixed period, your monthly amortization is completely predictable. Using the 2,000,000 / 20-year example, you would pay exactly 14,328 pesos every month for the first 12 months, making budgeting straightforward.
The key implication for your computation is this: the amortization formula is applied separately for each repricing period. At the end of Year 1, BDO will calculate your remaining outstanding balance, then apply the new prevailing rate to that balance for the next period. Your new monthly payment is computed on the reduced principal, which partially offsets a rate increase — but if rates rise sharply, your amortization could still increase materially.
This is why many borrowers who originally locked in at low rates several years ago are now facing payment shock as their loans reprice. If your fixed period has ended or is ending soon, it may be worth exploring refinancing options to lock in a new competitive rate.
Once your fixed period expires, your BDO housing loan reprices to a new interest rate — typically based on a benchmark rate such as the bank's prevailing housing loan rate or a market reference rate at the time of repricing. BDO will notify you of the new rate before it takes effect.
To illustrate the impact, here is a comparison using a 2,000,000 loan with a 20-year original term, after 1 year of payments at 6.00%:
- Remaining balance after Year 1 (approx): 1,958,600
- Remaining term: 19 years (228 payments)
| New Rate at Repricing | New Monthly Amortization | Monthly Increase vs. 6.00% |
|---|---|---|
| 6.00% | 13,930 | 0 |
| 7.00% | 15,205 | +1,275 |
| 8.00% | 16,546 | +2,616 |
| 9.00% | 17,946 | +4,016 |
As shown, a repricing from 6.00% to 9.00% would add roughly 4,016 pesos to your monthly bill. This is one of the most compelling reasons Filipino borrowers refinance — to reset their rate and extend their fixed period before an unfavorable repricing occurs.
BDO requires a minimum monthly income of 50,000 pesos to qualify for a housing loan. This applies to all eligible employment types, including private-sector employees, government workers, BPO employees, OFWs and seafarers, self-employed individuals, and licensed professionals.
Beyond the income floor, BDO uses a maximum Debt-to-Income (DTI) ratio of 40%. This means your total monthly loan obligations — including your new housing loan amortization — must not exceed 40% of your gross monthly income.
Practical example: If your gross monthly income is 50,000 pesos, your maximum total monthly debt payments allowed are 20,000 pesos (50,000 × 40%). If you have an existing car loan of 8,000 pesos per month, your housing loan amortization must not exceed 12,000 pesos.
Based on a 6.00% rate over 20 years, a 12,000 pesos maximum amortization corresponds to a maximum loan amount of approximately 1,675,000 pesos. To qualify for a higher loan, you would need a higher income, a longer term, or a co-borrower whose income can be combined with yours.
BDO does not publicly publish a hard ceiling on loan amounts for housing loans — the maximum you can borrow is determined by the appraised value of the property (loan-to-value ratio), your income, and your DTI ratio. In practice, BDO housing loans are commonly approved for amounts ranging from 1,000,000 pesos up to 10,000,000 pesos and beyond for high-value properties.
BDO offers loan terms of up to 25 years, which is among the longest available from a Philippine commercial bank. A longer term means a lower monthly amortization but higher total interest paid. Here is a sample computation across different loan amounts at a 6.00% rate and 20-year term to illustrate scale:
| Loan Amount | Rate | Term | Est. Monthly Amortization |
|---|---|---|---|
| 1,500,000 | 6.00% | 20 years | 10,746 |
| 3,000,000 | 6.00% | 20 years | 21,492 |
| 5,000,000 | 6.00% | 20 years | 35,820 |
| 8,000,000 | 6.00% | 20 years | 57,312 |
| 10,000,000 | 6.00% | 20 years | 71,640 |
These figures are estimates based on the reducing-balance formula. Actual amounts may vary slightly based on how BDO processes fees, taxes, and insurance premiums. Always request an official loan disclosure statement from BDO for precise figures.
To compute total interest paid, multiply your monthly amortization by the total number of payments, then subtract the original principal. The formula is:
Total Interest = (Monthly Amortization × Number of Payments) − Principal
Using the 2,000,000 / 6.00% / 20-year example:
- Monthly Amortization: 14,328
- Total Payments: 240
- Total Amount Paid: 14,328 × 240 = 3,438,720
- Total Interest = 3,438,720 − 2,000,000 = 1,438,720
This means on a 2,000,000 loan at 6.00% over 20 years, you pay roughly 1,438,720 pesos in interest alone — about 72% of the original principal. Now consider the same loan at 8.00%:
- Monthly Amortization at 8.00%: 16,729
- Total Amount Paid: 16,729 × 240 = 4,014,960
- Total Interest at 8.00% = 4,014,960 − 2,000,000 = 2,014,960
The difference in total interest between 6.00% and 8.00% on this loan is approximately 576,240 pesos. This illustrates why even a 2-percentage-point difference in your rate has an enormous long-term impact — and why locking in the lowest possible rate through refinancing can save hundreds of thousands of pesos over the life of your loan.
Yes. Refinancing is one of the most effective ways to reduce your monthly amortization, especially if your current loan is at a rate higher than BDO's current 6.00% p.a. offer. Through Nook, you can refinance your home loan to BDO at no cost to you — Nook's mortgage broker service is 100% free for borrowers.
Here is an example of the savings from refinancing a 3,000,000 outstanding balance with 18 years remaining:
| Scenario | Rate | Monthly Amortization | Monthly Savings |
|---|---|---|---|
| Current loan | 9.00% | 28,514 | — |
| Refinanced via BDO | 6.00% | 21,961 | 6,553 |
In this scenario, refinancing saves approximately 6,553 pesos per month, or over 78,600 pesos per year. Over the 18-year remaining term (assuming the rate stays constant), total savings could reach well over 1,000,000 pesos — though in practice the rate will reprice periodically.
BDO accepts refinancing applications from borrowers currently with any Philippine bank or lending institution. Eligible purposes include refinancing, home equity, renovation, and more. Typical BDO approval takes around 30 days. You can read what real borrowers say about refinancing experiences in the Home Loan Philippines Reddit 2026 review roundup for additional perspective.
Applying through Nook is straightforward and completely free for borrowers. Nook is the Philippines' first digital mortgage broker, and as an accredited partner of BDO, Nook can submit your application directly and help you navigate the requirements — at zero cost to you. Here is the typical process:
- Submit your details online — Fill out Nook's digital application form with basic information about your loan purpose, property, and income.
- Get matched and receive a quote — Nook assesses your profile and presents you with the best available rates, including BDO's 6.00% p.a. offer.
- Prepare your documents — Nook guides you through the required documents, which typically include valid IDs, proof of income (payslips, ITR, or financial statements), and property documents.
- Nook submits to BDO — Your application is submitted to BDO on your behalf. BDO's typical approval timeline is 30 days.
- Loan release — Once approved, BDO processes the loan release and your amortization schedule begins.
BDO accepts borrowers from a wide range of employment backgrounds: private-sector employees, government workers, BPO employees, OFWs and seafarers, self-employed individuals, and licensed professionals. The minimum qualifying monthly income is 50,000 pesos.
Because Nook works with multiple partner banks, you are not limited to BDO alone — Nook can help you compare offers and choose the bank that gives you the best rate and terms for your specific situation.