Pag-IBIG Cuts Home Loan Interest Rates to Boost Homeownership

In a bid to make homeownership more attainable for Filipinos and address the country's housing backlog, the Home Development Mutual Fund, commonly known as Pag-IBIG, has announced a reduction in its home loan interest rates.

Pag-IBIG stated that it aims to make home financing more affordable and accessible by slashing interest rates depending on the repricing period. The new rates offer significant reductions compared to the previous rates.

Under the updated rates, the Pag-IBIG housing loan now carries an interest of 6.25 percent per year for the three-year repricing period, down from the previous 6.375 percent.

Rates for the longer repricing periods have also been cut, with rates now at 6.5 percent for the five-year, 7.125 percent for the 10-year, and 7.75 percent for the 15-year terms.

Furthermore, the interest rates for the 20, 25, and 30-year repricing periods have been reduced to 8.5 percent, 9.125 percent, and 9.75 percent, respectively.

Pag-IBIG's loan rate for the one-year repricing period remains unchanged at 5.75 percent per annum.

Additionally, the special interest rate for home loans offered to minimum-wage earners remains at a highly competitive three percent per annum, making it the lowest rate in the market.

The decision to cut interest rates was made possible by Pag-IBIG's strong fiscal standing, record-high collections, and high-performing loans ratio. With collections at an all-time high and performing loans ratio reaching 92.53 percent, Pag-IBIG can fund the high demand for home loans without the need to borrow from the market.

Pag-IBIG CEO Marilene Acosta highlighted that despite the upward market trend, the agency's financial stability allowed for a reduction in interest rates.

Housing chief and Pag-IBIG Board of Trustees head Jose Rizalino Acuzar emphasized that this move is in line with the flagship housing program of the Marcos administration, which aims to cut the housing backlog in the country.

In the next six years, Pag-IBIG plans to finance at least 708,000 housing units, continuing its commitment to helping more Filipinos achieve their dreams of homeownership.

As of now, Pag-IBIG has over 15.4 million active members and holds over P800 billion in total assets, a figure projected to reach P1.5 trillion by 2028. With the reduced interest rates, the agency seeks to encourage more individuals to invest in their future through homeownership.