Can You Refinance a Home Loan with Commission-Based Income?

Yes — but it requires more preparation than a salaried application. If you work in sales, real estate, insurance, financial advisory, or any role where a significant portion of your earnings comes from commissions, bonuses, or variable pay, you can absolutely qualify for home loan refinancing in the Philippines. You just need to understand how Philippine banks assess variable income and position your application accordingly.

This guide walks you through exactly how to do that — from the documents you need to the banks most likely to approve your application. If you're currently paying 8%, 9%, or even 10% on your home loan, the savings available at today's rates make this worth pursuing seriously. Through Nook, the best available refinance rate is currently 5.99% p.a.

How Banks View Commission-Based Income

Philippine banks are not opposed to commission earners — but they are cautious about income they consider unpredictable. Their primary concern is debt serviceability: can you consistently make your monthly amortization even in a slow month?

To answer that question, banks typically look at two things: the stability of your income over time and the ratio of fixed salary to variable pay. The more your income tilts toward commissions and the more volatile that commission history looks, the more documentation they will require.

Here's the general framework most Philippine banks use when evaluating variable income:

The Documents You Need

Document preparation is where commission earners win or lose their refinance application. Banks need to reconstruct your income picture from paper. The more clearly and completely you present that picture, the better your outcome.

Core Income Documents

Supporting Bank Documents

Loan and Property Documents

If you are currently on a Pag-IBIG loan and are considering refinancing to a private bank for a lower rate, this guide on refinancing from Pag-IBIG to private banks covers the additional steps involved in that specific transition.

Calculating Your True Qualifying Income

Let's work through a realistic example so you can estimate your own situation before approaching any bank.

Say you are a Senior Sales Manager with a basic salary of 40,000 per month and average monthly commissions of 80,000 over the past 24 months. Your gross monthly income is 120,000.

If a bank applies a 75% discount to the commission portion:

With a standard 30% debt-to-income ratio, the maximum monthly amortization the bank will allow is 30,000. At 5.99% p.a. over a 20-year term, a monthly amortization of 30,000 supports a loan amount of approximately 4,200,000.

Now compare that to someone earning a flat 120,000 salary with no discounting applied — their qualifying income is 120,000, supporting a maximum amortization of 36,000 and a loan of approximately 5,000,000. This gap illustrates why it's important to understand how each bank discounts variable income before you apply — and why working with a mortgage broker who can match you to the right lender matters.

Which Banks Are Most Favorable to Commission Earners?

Not all Philippine banks apply the same formula. Here is a general picture of how major lenders approach variable income:

The key insight here is that there is no universal answer — bank appetite for variable-income borrowers changes with their portfolio mix, their current interest rate cycle positioning, and sometimes which branch officer is reviewing your file. This is why having a broker submit to multiple banks simultaneously significantly improves your odds and helps you compare actual offers rather than marketing rates.

How to Strengthen Your Application

Beyond documents, there are practical steps you can take to improve how banks score your file:

1. Clean Up Your Credit Profile

Pay down any outstanding credit card balances before applying. Banks pull your credit report and any delinquencies — even minor ones — will raise flags. A clean 12-month repayment history on all obligations signals that you manage variable income responsibly. If you have credit concerns, read our guide on refinancing with imperfect credit for specific strategies.

2. Maximize Your ITR Declared Income

This is a long-term move, but if you have been underdeclaring income to minimize tax, the cost shows up when you need a loan. For the 2 years leading into a refinance, ensure your ITR accurately reflects your actual earnings. The tax cost is often worth less than the rate savings you unlock through a better loan qualification.

3. Keep Commission Deposits Traceable

Bank statements are powerful corroborating evidence. If your commissions are paid into a dedicated account and you can show 12 to 24 months of consistent large deposits, banks have little reason to doubt your income narrative. Avoid cash commission arrangements — they are essentially invisible to lenders.

4. Prepare a Commission Income Summary

A one-page summary showing your commission income month by month for the past 2 years — with totals and averages clearly calculated — makes the reviewer's job easier. Banks process many applications and anything that makes your income picture immediately clear works in your favor. Some applicants include a brief note from their sales manager confirming the income structure.

5. Apply During a Strong Commission Period

If your industry is seasonal — real estate peaks in Q4, insurance has enrollment windows — time your application for when your most recent 3 to 6 months look strongest. Banks weigh recent income history more heavily than older figures.

What Rate Can You Actually Expect?

Commission earners who are well-documented and have strong income histories can access the same rates as salaried borrowers. The rate difference, if any, comes from the loan-to-value ratio and the bank's assessment of your risk profile — not specifically from being commission-based.

On a loan of 4,000,000 refinanced from 9% to 5.99% over a remaining term of 20 years:

For most commission earners, this is the equivalent of several months of commissions saved over the life of the loan — purely by refinancing.

The Nook Advantage for Variable-Income Borrowers

Nook's service is 100% free to borrowers. As a digital mortgage broker, Nook submits your application to multiple banks simultaneously and can identify which lenders are currently most favorable to commission-based income profiles. This matters because bank appetite shifts — a lender that was conservative six months ago may be actively seeking new mortgage volume today.

More practically, having a broker manage your application means your documents are reviewed before submission, reducing the risk of rejection due to easily fixable gaps. For commission earners who may have a more complex income story to tell, this pre-screening step alone can be the difference between approval and a wasted 30-day wait.

If you want to understand the full refinancing process from start to finish, our complete guide to refinancing your housing loan in the Philippines is the best place to start.