Pag-ibig sees rise in housing loans

Updated April 08, 2009 12:00 AM

CEBU, Philippines - The Home Development Mutual Fund (Pag-IBIG Fund) expects more members to avail of the housing loan especially now that adjustments have been made to lower the interest rates.

Pag-IBIG announced that as the Housing and Urban Development Council redefined housing packages, the new housing loan interest rate has been lowered and brackets have been expanded.

Interest rate structure retains the six percent rate for loans up to P400,000 below. Before, the interest rate of six percent is only applicable to loans of P300,000 below.

Loans over P400,000 up to P750,000 will only have a seven percent interest while interest rates have been slashed from 10.5 percent to only 8.5 percent for loans over P750,000 up to P1 million.

The rate for loans of P750,000 before is 8.5 percent, which is 1.5 percent higher than the new rate.

For loans over P1 million to P1.25 million, the interest rate will now be 9.5 percent.

The maximum loanable amount has also increased from P2 million to P3 million with only 11.5 percent interest rate.

Pag-IBIG Cebu City assistant department manager for operations Rio Teves said that they are expecting an increase in application for housing loans especially between the P750,000 to one million loan bracket.

Teves said they have observed that most of the loans are in that bracket and with the decrease in the interest rate, they foresee that more members will take advantage of the lowered rate.

Teves said that Pag-IBIG Cebu City has allotted around P43 billion for housing, which they believe will be a big help to the economy.

With the new changes, members can now afford to buy their own home which is a better alternative to renting. The new rates can give members with one million loans a 15.92 percent savings.

“In a one million loan, a member is paying around P9,147 but with the new rates they will only pay P7,689,” Teves said.

As of March 2009, the number of borrowers in Cebu City reached 548, which totaled to a release of P400 million. Pag-IBIG still expects that it will increase this month.

According to Pag-IBIG, the latest amendments are intended to make the housing loan program more affordable to members, especially workers in highly urbanized areas whose housing needs often range from more than P750,000 up to P1 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.” – Jessica Ann R. Pareja/LPM (THE FREEMAN)