What Is a Home Equity Loan in the Philippines?

A home equity loan — sometimes called a real estate equity loan or property equity loan — lets you borrow money using your home as collateral, based on the portion of the property you already own outright. In simple terms, it turns the value you've built up in your property into usable cash.

Here's how it works: if your home is worth 5,000,000 pesos and you still owe 2,000,000 pesos on your mortgage, you have 3,000,000 pesos in equity. A bank can lend you a portion of that equity — typically 60% to 80% of the property's appraised value, minus any outstanding loan balance.

Filipino homeowners use home equity loans for a wide range of purposes: funding a child's college education, renovating a property, consolidating high-interest debt, starting a business, or covering medical expenses. Unlike personal loans, equity loans typically come with significantly lower interest rates because the property acts as security for the lender.

Home Equity Loan vs. Home Loan Refinancing: What's the Difference?

These two products are often confused, but they serve different purposes:

If your primary goal is to access cash, both a home equity loan and cash-out refinancing can work. However, if you're also paying a high interest rate on your current mortgage, cash-out refinancing through a platform like Nook may be the smarter move — you solve two problems at once.

Which Banks Offer Home Equity Loans in the Philippines?

Several major Philippine banks offer equity-based loan products, though they may use different names such as "home equity loan," "property equity loan," or "multi-purpose loan secured by real estate." Here's an overview of the landscape:

BDO Unibank

BDO offers a Home Equity Loan product that allows existing homeowners to borrow against their property. Loan amounts typically start at 500,000 pesos, with terms of up to 10 years for equity loans (separate from their standard home loan terms). Interest rates vary based on the fixing period chosen.

BPI (Bank of the Philippine Islands)

BPI's Home Loan product includes an equity feature that allows qualified borrowers to access the value of their property. BPI is known for competitive rates and a relatively streamlined application process. Their loan-to-value (LTV) ratio typically goes up to 70% of the appraised value.

Metrobank

Metrobank offers a real estate loan product that can be structured as an equity loan. They serve both residential and commercial properties and have an established network for property appraisals across Metro Manila and major provincial cities.

Security Bank

Security Bank has a Home Equity Loan product with competitive rates and terms. They are known for being flexible with borrower profiles and property types, including townhouses and condominiums.

RCBC (Rizal Commercial Banking Corporation)

RCBC offers equity-based financing and is particularly active in housing finance. Their mortgage team can structure equity loans for a range of property types.

EastWest Bank

EastWest Bank has a home loan product that includes equity features, with loan amounts starting at 500,000 pesos and LTV ratios up to 80% for certain property types.

PNB (Philippine National Bank)

PNB offers multi-purpose loans secured by real estate, which function similarly to home equity loans. These can be used for business purposes, renovations, or personal needs.

Pag-IBIG (HDMF)

Pag-IBIG offers a Multi-Purpose Loan (MPL) for members, though it is not a traditional home equity loan. However, Pag-IBIG also has a housing loan that can be refinanced. For larger equity-based borrowing, commercial banks remain the primary option.

Chinabank and UnionBank

Both institutions offer real estate-backed lending products and are worth contacting directly for current rates and terms, especially if you already have a banking relationship with them.

Important note: Not all banks openly advertise home equity loan products on their websites. In many cases, you'll need to visit a branch or speak with a relationship manager to explore your options. This is one reason why working with a mortgage broker like Nook — which has direct relationships with multiple lenders — can save you significant time.

How Much Can You Borrow?

The amount you can borrow depends on three main factors:

Here's a practical example:

Most banks require a minimum equity loan of 500,000 pesos, and the loan term for equity products is typically 5 to 10 years (shorter than primary mortgage terms).

What Are the Interest Rates?

Home equity loan interest rates in the Philippines vary by bank and fixing period, but they generally range from 7% to 10% per annum for a 1-year fixed rate, with longer fixing periods carrying slightly higher rates. These are higher than primary purchase home loan rates at the same banks.

This is an important consideration: if you're currently paying a high rate on your existing mortgage AND you need to access equity, a cash-out refinance may result in a single, lower blended rate rather than carrying two loans — one at a high rate and one at a new equity rate. Through Nook, some borrowers access rates as low as 5.99% p.a. on their refinanced loan, which can make cash-out refinancing significantly cheaper than layering an equity loan on top of an expensive existing mortgage. You can explore potential savings using the home loan refinance calculator to see how the numbers compare.

Documents Required for a Home Equity Loan

While requirements vary by bank, you'll typically need to prepare:

For borrowers who are self-employed or have irregular income streams, requirements may include two years of audited financial statements and bank statements. OFW borrowers will typically need to provide a Special Power of Attorney (SPA) and proof of employment abroad.

The Home Equity Loan Application Process

Here is what a typical application timeline looks like when going directly to a bank:

  1. Initial inquiry and pre-qualification (1–3 days): Contact the bank, provide basic information, and get a rough idea of your eligibility.
  2. Formal application and document submission (1–2 weeks): Submit all required documents. Banks are strict about completeness — missing documents reset the clock.
  3. Property appraisal (1–2 weeks): The bank sends their appraiser to assess your property's current market value.
  4. Credit evaluation and approval (2–4 weeks): The bank's credit committee reviews your application.
  5. Loan offer and signing (1 week): If approved, you'll receive a formal offer letter. Review carefully before signing.
  6. Loan release (1–2 weeks): Funds are released after title annotation and other formalities.

Total timeline: typically 6 to 12 weeks when going directly to a bank. Working with a broker who has established lender relationships can reduce this timeline significantly.

Alternatives to a Home Equity Loan

Before committing to an equity loan, consider these alternatives:

Is a Home Equity Loan Right for You?

A home equity loan makes the most sense when:

It makes less sense if your existing mortgage rate is high (above 7%), in which case a cash-out refinance through Nook may be more cost-effective. Nook's service is 100% free to borrowers, and you can compare options across multiple banks in one place rather than applying one by one.