Home Loan Calculator Based on Salary

Philippine banks use a formula called the Gross Monthly Income (GMI) multiplier combined with a debt-to-income (DTI) ratio to determine how much you can borrow. Here's how it typically works:

1. Step 1 — Determine your allowable monthly amortization: Banks allow your monthly mortgage payment to be 30% to 40% of your gross monthly income. For example, if you earn 80,000 a month, your allowable amortization is between 24,000 and 32,000.
2. Step 2 — Factor in the interest rate and loan term: Using the allowable monthly amortization, the bank works backwards using an amortization factor (a standard figure per 1,000 pesos of loan) to arrive at the maximum principal you can borrow. At a rate of 6% p.a. over 20 years, the monthly amortization factor is roughly 7.16 per 1,000 pesos.
3. Step 3 — Apply property value limits: Banks typically lend up to 80% of the appraised value of the property (loan-to-value or LTV ratio), so your loanable amount is also capped by the property's appraised value.

The final loanable amount is whichever is lower: your income-based maximum or the LTV-based maximum. This is why both your salary and your target property price matter when applying for a home loan.

Most Philippine banks cap your monthly home loan amortization at 30% to 40% of your gross monthly income (GMI). The exact percentage varies by bank and by how many other loan obligations you currently have.

• BDO, BPI, Metrobank: Typically use 30% to 35% of GMI as the maximum allowable amortization
• Security Bank, RCBC, EastWest Bank: May allow up to 40% of GMI in some cases
• Pag-IBIG (HDMF): Generally uses 30% of net take-home pay (not gross), which is more conservative

It's important to note that this percentage applies to your total debt obligations — not just the home loan. If you already have a car loan or personal loan, the payments on those reduce the amount available for a mortgage. For example, if 30% of your 80,000 GMI is 24,000 but you're already paying 5,000/month on a car loan, the bank may only allow 19,000 for your home loan amortization.

With a gross monthly income of 50,000, here's what you can typically expect to borrow, assuming no other existing loan obligations:

Notice how a lower interest rate meaningfully increases your loanable amount — even at the same income level. If you already have a home loan at a higher rate, use Nook's refinance calculator to see how much refinancing could save you each month.

With a gross monthly income of 100,000 and no existing loan obligations, here are the typical estimates based on 30% GMI allowance:

As you can see, the difference between borrowing at 8% vs 6% p.a. over 20 years is roughly 600,000 in additional purchasing power — without needing to earn a single peso more. This is the real power of securing a lower rate, whether through a new purchase loan or by refinancing an existing mortgage.

Most Philippine commercial banks — including BDO, BPI, Metrobank, Security Bank, and RCBC — base home loan eligibility on your gross monthly income (GMI), which is your income before tax deductions, SSS/PhilHealth/Pag-IBIG contributions, and other withholdings.

Pag-IBIG (HDMF) is the main exception — they compute affordability based on your net take-home pay, which is more conservative. For a borrower earning 60,000 gross, the net pay might be around 48,000 to 52,000 after deductions, which would lower the maximum amortization Pag-IBIG allows.

For employed borrowers, banks verify your income through:

• Certificate of Employment (COE) with monthly compensation stated
• Latest 3 months' pay slips
• Latest Income Tax Return (ITR) — BIR Form 2316

For self-employed borrowers and business owners, banks typically use the average of the last 2–3 years of net income as declared in your ITR. Some banks may apply a loading factor (e.g., taking only 70% to 80% of declared income) to be conservative.

Yes — both OFWs and self-employed borrowers can qualify for a home loan in the Philippines, though the income documentation requirements differ from those of locally employed borrowers.

For OFWs (Overseas Filipino Workers):

• Income is computed based on your foreign currency salary, converted to Philippine peso using the prevailing BSP exchange rate
• Required documents typically include: OEC, POEA-verified employment contract, latest 3–6 months of remittance records or payslips, and a passport copy
• Most banks lend to OFWs but may require a co-borrower based in the Philippines (a spouse or close relative)
• Pag-IBIG also has a dedicated OFW loan program with competitive terms

For self-employed borrowers and business owners:

• Banks use your average net income from the last 2–3 years as declared in your ITR (BIR Form 1701 or 1702)
• You'll need to submit audited financial statements (AFS) for the last 2–3 years
• Business registration documents (DTI for sole proprietors, SEC for corporations), and bank statements for 6–12 months are also required
• Banks may be more conservative with self-employed income, sometimes using only 70%–80% of declared net income

The core principle remains the same: your allowable monthly amortization is 30%–40% of your qualified income, regardless of your employment type.

Yes, significantly. Banks look at your total debt service ratio (DSR) — the percentage of your gross monthly income that goes toward all loan payments combined, including the proposed home loan. If you already have a car loan, personal loan, or credit card minimum payments, those reduce how much of your income is available to service a new mortgage.

Here's a practical example:

• Gross monthly income: 80,000
• Bank's maximum DSR: 35% → Maximum total monthly debt payment: 28,000
• Existing car loan monthly payment: 8,000
• Available for home loan amortization: 20,000

At 7% p.a. over 20 years, a 20,000 monthly amortization supports a loan of approximately 2,580,000 — versus roughly 3,200,000 if you had no existing loans. This is why financial planners often advise paying off consumer loans before applying for a home loan.

It also means that if you have an existing home loan at a high rate and refinance to a lower one, your monthly payment drops — freeing up more room in your debt-service ratio if you ever need additional financing later.

There is no single "best" bank — the loanable amount depends on the combination of your income, the bank's specific DTI policy, the interest rate they offer you, and the loan term they approve. However, here are some general observations:

• BDO and BPI — among the most widely used for home loans; generally conservative with a 30%–35% GMI cap but offer long repayment terms of up to 25 years
• Security Bank and RCBC — sometimes more flexible on DTI, allowing up to 40% in certain cases, which can mean a higher approved amount for the same salary
• Pag-IBIG (HDMF) — offers the most competitive rates for lower loan amounts (typically up to 6,500,000) and is accessible to both employed and self-employed members; great for first-time buyers
• Chinabank and EastWest Bank — competitive for self-employed borrowers and those with variable income

The most important factor isn't which bank gives the highest amount — it's which bank gives you the lowest interest rate, because a lower rate increases your effective purchasing power without requiring higher income. The best refinance rate currently available through Nook is 5.99% p.a., which is significantly lower than the 7%–10% most borrowers are paying today.

Refinancing doesn't directly increase your loanable amount — your maximum borrowing capacity is still determined by your current income. However, refinancing to a lower interest rate has two powerful effects on your financial position:

1. Lower monthly payments: If your rate drops from, say, 8.5% to 5.99% p.a. on a 4,000,000 loan balance with 15 years remaining, your monthly amortization could fall from approximately 39,400 to around 33,700 — a saving of roughly 5,700 per month, or 68,400 per year.
2. More room in your debt-service ratio: Because your monthly payment is lower, more of your income is "free" in the eyes of lenders. This gives you more flexibility if you ever need to take out an additional loan in the future.

If you're curious how much you could save, Nook's free home loan refinance calculator can give you a side-by-side comparison of your current loan versus a refinanced one at today's best rates. Nook's service is completely free to borrowers — we're paid by the bank, not you.

While requirements vary slightly by bank, here is the standard documentary checklist for employed Filipino borrowers applying for a home loan:

Personal documents:

• Two valid government-issued IDs (passport, SSS, GSIS, PhilHealth, driver's license, voter's ID)
• Marriage certificate (if applicable) or PSA birth certificate
• Duly accomplished bank application form

Income documents (employed):

• Certificate of Employment (COE) with monthly salary stated, on company letterhead
• Latest 3 months' payslips
• BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) for the last 2 years

Property documents:

• Certified true copy of the Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT)
• Lot plan / floor plan / vicinity map
• Contract to Sell or Deed of Sale (for purchase transactions)
• Tax Declaration and latest real property tax receipts

For refinancing applications:

• Latest statement of account from your current bank showing outstanding balance
• Proof of updated loan payments (e.g., passbook or payment receipts)

Processing times typically range from 2 to 6 weeks depending on the bank and completeness of your submission. Working with Nook means a dedicated advisor helps you prepare and submit your documents to multiple banks simultaneously — saving you weeks of back-and-forth.