What Is a House and Lot Loan in the Philippines?

A house and lot loan — more formally called a residential real estate loan or housing loan — lets you borrow money from a bank or government fund to purchase a property that includes both the land and the structure built on it. Instead of paying the full purchase price upfront, you repay the loan in fixed monthly installments over a term that typically ranges from 5 to 25 years.

In the Philippines, house and lot loans are offered by most major commercial banks, as well as government-backed programs like Pag-IBIG (HDMF). The loan covers the property's appraised value (usually up to 80% to 90%), and you pay the remaining balance as a down payment before or at turnover.

How Much Can You Borrow?

Loan amounts for house and lot purchases in the Philippines typically start at 500,000 and can go up to 50,000,000 or more for high-end properties. The actual amount a bank will approve depends on three things: the appraised value of the property, your gross monthly income, and your existing financial obligations.

Most banks follow a debt-service ratio (DSR) rule, meaning your total monthly loan payments — including the new housing loan — should not exceed 30% to 40% of your gross monthly income. For example, if your household earns 120,000 per month, banks will typically allow a maximum monthly amortization of around 36,000 to 48,000.

Loan-to-Value (LTV) Ratios

Banks in the Philippines usually finance between 80% and 90% of the appraised value of the property. So if the property is appraised at 5,000,000, expect to borrow between 4,000,000 and 4,500,000, with the rest coming from your own pocket as a down payment. Some banks offer up to 90% LTV for properties below a certain threshold or for borrowers with excellent credit profiles.

House and Lot Loan Interest Rates: What to Expect

Interest rates on housing loans in the Philippines are almost never fixed for the entire loan term. Instead, banks offer a promotional fixed rate for an initial repricing period — typically 1, 2, 3, 5, or 10 years — after which the rate is repriced based on prevailing market rates.

As of 2024, typical bank rates for house and lot loans look like this:

These rates vary by bank, borrower profile, and the specific property. Pag-IBIG typically offers lower rates for qualified members, starting around 6.375% for a 1-year fixing period on loans up to 750,000.

Monthly Payment Examples

To give you a concrete sense of what you'll be paying, here are sample monthly amortizations at different loan amounts and interest rates, assuming a 20-year loan term:

Loan Amount: 2,000,000

Loan Amount: 4,000,000

Loan Amount: 6,000,000

These figures are for illustration only and assume the rate is fixed for the full 20-year term. In practice, your rate will be repriced periodically, which means your payment can increase when market rates rise.

Which Banks Offer House and Lot Loans in the Philippines?

Almost every major Philippine bank offers housing loans. Here's a quick overview of your main options:

BDO Unibank

BDO is the country's largest bank and one of the most popular choices for housing loans. They offer competitive rates and accept a wide range of property types, including RFO (ready-for-occupancy) units, pre-selling condos, and house-and-lot packages from accredited developers. BDO is also widely used for refinancing — if you currently have a BDO loan and want to explore a lower rate, check out refinancing your BDO home loan through Nook.

BPI (Bank of the Philippine Islands)

BPI is known for its streamlined application process and strong online banking tools. Their housing loan rates are competitive, and they have a broad network of accredited appraisers and developers nationwide.

Security Bank

Security Bank offers some of the most competitive housing loan rates in the market, particularly for borrowers with strong income profiles. They are also a strong option for refinancing — see how Security Bank housing loan refinancing works if you're already a borrower there or considering switching to them.

Metrobank

Metrobank offers flexible loan terms up to 25 years and accepts both employed and self-employed borrowers. They have a large branch network and are particularly strong in the Metro Manila market.

PNB (Philippine National Bank)

PNB is a solid option for OFW borrowers and offers dedicated housing loan products for Filipinos working abroad. They also accept co-borrowers to help increase the loanable amount.

RCBC

RCBC offers competitive rates, especially on shorter fixing periods. They also accept applications from self-employed borrowers and have a growing digital application process.

Pag-IBIG (HDMF)

Pag-IBIG is the go-to option for lower-income earners and active members of the fund. Loan amounts go up to 6,000,000 for qualified members, with rates starting lower than most banks. The tradeoff is that processing can take longer and there are stricter documentary requirements.

How to Apply for a House and Lot Loan in the Philippines

The application process is broadly the same across most banks, though timelines and specific requirements vary. Here's what to expect:

Step 1: Get Pre-Qualified

Before you fall in love with a property, talk to a bank or broker to understand how much you can borrow. Banks will assess your income, employment status, age, and existing obligations. This step is informal and usually doesn't require a formal credit check yet.

Step 2: Choose Your Property

Make sure the property is clean-titled, has no encumbrances, and is located in an area the bank is willing to finance. Banks maintain lists of accredited developers and preferred locations. Properties with unclear titles or in flood-prone areas can be difficult to finance.

Step 3: Submit Your Application and Documents

Core documents typically required include:

Step 4: Property Appraisal

The bank will send an accredited appraiser to assess the fair market value of the property. This appraisal determines the maximum loanable amount. The borrower usually shoulders the appraisal fee, which ranges from 3,500 to 6,000 depending on the bank and property location.

Step 5: Loan Approval and Offer

Once the appraisal is done and your documents are complete, the bank's credit team will evaluate your application. Approval typically takes 5 to 15 business days. You'll receive a Letter of Approval (LOA) detailing the approved loan amount, interest rate, fixing period, and monthly amortization.

Step 6: Loan Takeout and Title Transfer

After signing the loan agreement and mortgage documents, the bank releases the funds directly to the seller. The property title is then transferred to your name with a real estate mortgage annotation in favor of the bank. Once the loan is fully paid, the bank releases the title clean of any encumbrance.

Fees and Costs to Budget For

A housing loan comes with several one-time costs that borrowers often underestimate. Budget for the following on top of your down payment:

Total miscellaneous fees typically run between 2% and 3% of the loan amount, so on a 4,000,000 loan, budget an extra 80,000 to 120,000 for these costs.

What Happens When Your Rate Gets Repriced?

This is where many homeowners get a surprise. After your initial fixing period ends — say, after 3 or 5 years — your bank will reprice your loan based on current market rates. If rates have risen, your monthly payment goes up, sometimes significantly.

For example, a 4,000,000 loan taken at 7.50% p.a. over 20 years has a monthly payment of about 32,224. If that rate gets repriced to 9.50% after 5 years, the new payment on the remaining balance jumps to approximately 36,900 — an increase of nearly 4,700 per month.

This is exactly why many homeowners explore refinancing at or before their repricing date. By switching to a bank offering a lower rate, you can lock in savings for another repricing period. If you're approaching a repricing date, it's worth comparing offers across banks before simply accepting whatever rate your current bank proposes.

Is Refinancing Worth It After Taking a House and Lot Loan?

Yes — in many cases, refinancing your house and lot loan can reduce your monthly payment by thousands of pesos per month. Through Nook, the best available refinance rate is currently 5.99% p.a., which is meaningfully lower than the 7% to 10% most existing borrowers are currently paying.

On a 4,000,000 outstanding balance over 15 remaining years, moving from 9.00% to 5.99% reduces your monthly payment from approximately 40,570 to approximately 33,740 — a monthly saving of around 6,830, or more than 81,960 per year. Over the remaining loan term, that adds up to over 1,200,000 in total interest savings.

Nook is the Philippines' first digital mortgage broker and helps you compare refinancing offers from multiple banks — completely free. There are no broker fees and no obligation to proceed after you see your options.