Looking for the best housing loan deal in the Philippines? We are, too, that’s why we are always on the lookout for the best available home loan offers and promos by banks in the Philippines.
In 2011, we wrote about the Home Loan Interest Rates offered by several Philippine banks. In 2012, we talked about two banks that offered low 1-year housing loan rate of 7.50 to 7.75% (see 2012 BPI housing loan promo and 2012 BDO home loan promo).
We continuously keep an eye on the best housing loan deals and, recently, we saw one offered by Banco de Oro (BDO).
BDO’s Home Loan Double Deals Promo
The country’s largest bank, Banco de Oro, is offering home loan borrowers the “Double Deals Promo” wherein the 1-year interest rate can be as low as 5.50% per annum.
The promo is open to all borrowers who can submit their housing loan applications on or before May 31, 2013. The loan must be subsequently approved and availed of on or before August 31, 2013.
Housing Loan Purposes
In order to avail of the “Double Deals Promo”, borrowers must use the loan for the following purposes:
- Purchase of a vacant lot
- Purchase of a house and lot
- Purchase of a townhouse unit
- Purchase of a condominium unit
- Refinancing of an existing home loan from another bank
- Reimbursement of home and acquisition cost
- Purchase of property using another collateral
- Home Construction and Home Improvement
- Equity Loan
Although refinancing of an existing home loan taken from another bank is included in the promo, refinancing an existing BDO housing loan is not included in this offer.
BDO Housing Loan Promo Interest Rates
BDO’s home loan promo rates vary depending on the fixing period. The fixing period represents the number of years the interest rate will be fixed. After the fixing period, the interest rate will be repriced and and may actually be higher than the originally approved rate. For this promo, BDO is offering the following interest rates:
- 1 Year: 5.55%
- 2-3 Years: 6.88%
- 4-5 Years: 7.50%
- 6-10 Years: 9.50%
These rates are relatively low in the industry, but take note that there is interest rate repricing once the fixing period is over.
Rate Repricing Options
For example, if you chose the 1-year fixed rate plan, you will pay an interest rate of 5.55% during the first year. However, after the first year, the rate will be repriced and the rate could increase (it’s also possible for the rate to be lower but this rarely happens).
If you chose the 4-5 years plan, you will be charged a 7.50% interest rate for 4-5 years but if your total loan period is 10 years, the interest rate will be repriced after the 5th year and, again, this could be higher than 7.50% (it could also remain unchanged at 7.50%).
Home loan borrowers must wisely choose, then, an appropriate fixing period that they will find comfortable to pay. If they want a more stable and consistent monthly amortization, clients should opt for longer fixing periods so that they will not face the risk of higher interest rate once the rate is repriced.
If they want lower amortization without fear of higher interest rate after repricing, then borrowers may choose a shorter fixing period.
Payment Grace Period
BDO’s housing loan deal is dubbed “Double Deals” because customers get two additional benefits once their loan is approved.
First, approved borrowers may avail of the 55-days grace period. With this offer, the due date of the first monthly amortization is the 56th — not the 30th — day after the loan is released. If, for example, the loan was approved and released on May 3, 2013, the monthly amortization will start not one month later, but 55 days later, that is, on June 28, 2013. Clients, then, have more time to prepare for the first monthly amortization. Succeeding monthly amortizations, however, will follow the standard billing schedule with intervals of 30-31 calendar days.
The second benefit is a free PLDT Telpad unit. The Telpad units will be given to borrowers whose loan application was approved and booked on or before May 31, 2013 regardless of amount. If the approved loan amount is at least P3 million, two (2) Telpad units will be given for free to the client.
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We are still on the lookout for more home loan deals and offers so stay tune for future updates. If you know of a good deal, tell us by posting a comment below.
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