Pag-IBIG reduces housing loan interest rates

To make the monthly amortization for its most popular loan package even more affordable, the Home Mutual (Pag-IBIG) Fund further reduced the interest rates of its housing loans.

The rate reduction dovetailed with the Fund’s commitment to allocate P82 billion for housing and multi-purpose loans this year as its contribution to President Gloria Macapagal Arroyo’s economic stimulus package.

This is good news for the low and middle income families as they will still be able to fulfill their dreams of building a house even at this time of global economic slump.

The interest rate for loans up to P400,000 has been reduced from seven percent to six percent per annum.

The interest rates for loans worth over P400,000 up to P750,000 is seven percent, while for loans over P750,000 up to P2 million, the interest rates is 10.5 percent.

As a result of this rate cut, the monthly payment for principal and interest for a P400,000 loan will go down from P2,661.21 to P2,398.20 at the maximum payment period of 30 years.

As the bulk of housing loans taken out by Pag-IBIG were actually those worth P400,000 and under, this latest interest rate adjustment will benefit the low income earner.

Vice President Noli de Castro said, “in these difficult times, we want more Pag-IBIG members to have home ownership as an affordable option to renting.” The market for Pag-IBIG loans are mostly the low income earners.

The adjustment in interest rates hopefully will attract more borrowers and keep the housing market vibrant, generate business activity in related industries, and create much-needed jobs for the Filipino workers.

Aside from rate adjustment, Pag-IBIG is also reviewing its housing loan application process in order to find ways to further streamline it.