Lower interest rate for Pag-IBIG housing loan eyed

The Pag-IBIG Fund is set to reduce the interest rates on its housing loans to ease the difficulties experienced by its borrowers because of the ongoing global economic slowdown.

Housing and Urban Development Coordinating Council (HUDCC) and Pag-IBIG Fund chairman Michael Defensor said the revised housing loan guidelines that would reduce the interest rates would be presented to the Pag-IBIG board for approval on Oct. 29.

The new rates are nine percent per annum for loans of up to P180,000; 12 percent for loans over P180,000 up to P500,000; and 14 percent for loans over P500,000 up to P2 million, he said.

These rates shall cover loans whose payments are made on or before the due date, Defensor added.

The nine percent interest rate shall apply to all housing loans up to P180,000 regardless of the selling price of the house-and-lot package to which the loan proceeds are applied.

However, if payment is made after the due date, the interest shall revert to its old rate of 12 percent for loans up to P180,000; 16 percent for loans over P180,000 to P500,000 and 18 percent for loans over P500,000 to P2 million.

The lower interest rates for prompt payers or those who shall opt for the salary deduction scheme, is an incentive for those who shall remit their payments on or before the due date.

At the same time, the new guidelines provide that a member-borrower shall not be required to complete 24 months of membership to qualify for a housing loan.

The liberalized guidelines shall allow a member to make a lump sum payment equivalent to 24 monthly contributions to meet this requirement.

With this amendment, a member may avail himself of his housing loan benefit immediately after complying with the required contributions.

The refinancing of an existing mortgage loan with an institution acceptable to Pag-IBIG shall be included in the housing program’s loan purposes, provided the account is current and updated.

This proposed amendment is intended to align the loan purposes under the Expanded Housing Loan Program with those provided under the Housing Program for Middle-Income and Pag-IBIG Overseas Members.

The proposed liberalized guidelines of the Pag-IBIG Housing Loan Program is a direct response to the clamor of member-borrowers and is expected to speed up the processing of housing loan applications under developer accounts.