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The battle for low housing loan rates in the Philippines is on. In the previous months, we’ve seen a variety of advertisements by local banks aggressively promoting their discounted home loan rates.

Here is a list of housing loan rates offered by Philippine banks.

(Update October 2014: Compare New Housing Loan Interest Rates in the Philippines)

Home Loan Interest Rates in the Philippines (as of June 2011)

Repricing Period Allied Bank BDO BPI FB* BPI FB** EastWest Bank HSBC Robinsons Bank* Security Bank
1 year 8.50% 7.88% 5.50% 8.75% 5.88% 5.75% 5.88% 8.75%
2 years 9.00%         7.49%   9.50%
3 years 9.50% 9.75% 7.75% 9.75%   7.69%   9.50%
5 years 9.75% 10.00% 8.75% 10.00%   8.99%   10.00%
10 years 11.50% 11.00% 10.00% 11.00%        
15 years 11.50% 11.25% 11.00% 11.25%        
16-25 years   11.50%   11.50%        

Notes:
* BPI FB – promo rates of BPI Family Savings Bank, valid until June 30, 2011
** BPI FB – published interest rates of BPI and BPI Family Savings Bank, before the promo period
*** Promo rate of Robinsons Bank, valid until June 30, 2011; no other fixed interest rates published for longer years

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It’s good to see banks fighting it out by driving down interest rates.

Customers, however, must be wary of the terms and conditions of the housing loan agreement because the rates offered are usually just promo rates that are subject to repricing after a certain period.

Repricing means the housing loan can have a new interest rate charged to it after a certain period. A one-year repricing option, for example, means that at the end of the first year, a new interest rate may be charged on the loan. Usually the new interest rate to be charged is higher than the original interest rate.

Just a tip: Don’t be lured by ultra-low housing loan interest rates that are subject to annual repricing. Choose that only if you believe the market will continue to have low interest rates in the next few years.

But if you’re not sure about the interest rate and you’re also not ready for higher monthly payments, better to lock in a relatively higher interest rate for a longer period of time so you can have peace of mind as regards your monthly amortization in the coming years.

(Update October 2014: Compare New Housing Loan Interest Rates in the Philippines)

Source: Inquiries with Philippine banks

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