Pag-Ibig lowers loan rate & increase loanable amount to Php3M

April 18, 2009 - PRLog -- VICE President and Chairman of the Housing and Urban Development Coordinating Council (HUDCC) and the Home Development Mutual Fund (Pag-IBIG Fund) Board of Trustees,  today  announced further adjustments to its end-user financing program, this time creating additional housing loan brackets with corresponding lower interest rates. The rate adjustments are aligned with the redefined housing packages set by the HUDCC.

The new Pag-IBIG housing loan interest rate structure retains the 6%-rate for loans up to P400,000, and 7% for loans over P400,000 up to P750,000.

Interest rates have been slashed from 10.5 percent to only 8.5% for loans over P750,000 up to P1 million, and to 9.5% for loans over P1 million to P1.25 million.

Meanwhile, interest for loans over P1.25 million to P2 million remains at 10.5%.

Along with the latest rate adjustment, the Pag-IBIG Board also approved the increase in maximum loanable amount to P3 million, at an interest rate of 11.5% per annum for loans starting at over P2 million.

De Castro said the latest amendments in the Pag-IBIG housing loan program are intended to make the program more affordable to members, especially workers in highly-urbanized areas whose housing needs often range from more than P750,000 up to 1 million.  Likewise, with the Board’s approval of raising the loan ceiling to P3 million, Pag-IBIG will be able to meet the home financing needs of members belonging to the middle-income earners.  “This should give Pag-IBIG members a wider range of choices in buying a house,” he said.

Over the last two years, the Fund has implemented significant improvements in its end-user financing program.   In 2007, Pag-IBIG has reduced the interest rates for loans over P300,000 to P750,000 from 10.5% to 7%.  Earlier this year, the socialized housing bracket was expanded to cover loans of up to P400,000.

With the new changes taking effect April 1, Pag-IBIG member-borrowers can look forward to more value for their money as well as savings especially at this time of economic difficulties.  “The savings given the lower monthly amortizations should convince Pag-IBIG members that buying their own home is a more practical alternative to renting,” De Castro added.

Members who avail of a P1 million housing loan stand to save 15.94% per month with amortizations of only P7,689.13 (covering principal and interest) over a 30 year period, compared to P9,147.39 under the old rate  of 10.5%.

Year-on-year figures show the Pag-IBIG Fund is able to maintain the growth in its housing loan takeout.  From P4.59 billion, the Fund recorded a P5.83 billion total takeout from January to February of the current year, representing a 27% increase.

“The demand for housing, especially from the low and middle-income earners, continues to be strong despite the global financial crisis,” he said.

Following these amendments in the Pag-IBIG housing loan program, the Fund expects to maintain a steady growth in loans granted to members and attain its target of P43 billion takeout for 2009.  “This will further sustain the housing sector by providing financing to home buyers at very attractive, affordable rates,” De Castro said.

Posted by:
Raymond Ong
Chief-Land Asia Institute Philippines
http://www.landasia.com.ph
http://www.cebuhome.net

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