The Key Differences Between a Commercial Bank, SSS, and Pag-IBIG Housing Loans

To many people, the ultimate goal is to stop renting and own their own home. Unfortunately, most people cannot afford to pay for a house in full with their own money. This is where a home loan comes in. Buying your first home is a significant investment and it’s crucial to approach the application process with careful thought.The Key Differences Between a Commercial Bank, SSS, and Pag-IBIG Housing Loans

The first step in buying a home is to use a mortgage calculator. This is usually a free online tool that can help you determine how much financing you can qualify for. Once you have an idea of how much financing you need, it’s time to choose a lender.

When it comes to home loans, three options come to mind: a Pag-IBIG housing loan, an SSS housing loan, and a commercial bank housing loan. Since buying a home is one of the biggest purchases you’ll make, it’s important to choose a financing option that suits your current lifestyle. Deciding which option to choose may seem overwhelming, but we’re here to help. Below, we provide a detailed description of each housing loan option, as well as a comparison chart to help you decide which home loan option is best for you.

Pag-IBIG Housing Loan

The Pag-IBIG Fund, also known as the Home Development Mutual Fund, is a national savings program designed to provide affordable home loans for Filipinos. This program allows individuals to use the loan for various purposes such as purchasing a new property, fully developed or adjoining lots under 1,000 square meters, residential house,s and lots, condominiums or townhouses, completing construction, or refinancing an existing home.

Pag-IBIG housing loans provide financing of up to ₱6,000,000.00 with a maximum repayment term of 30 years. The amount approved for a loan will depend on the individual’s need, capacity to pay, and loan-to-appraisal value ratio. The loan-to-appraisal value ratio for Pag-IBIG is determined based on specific guidelines

The Pag-IBIG loan-to-appraisal value ratio is as follows:

Loan Amount Appraised Value
Up to ₱400,000.00 100% of the home amount can be financed through Pag-IBIG
From ₱400,000.00 – ₱1,250,000.00 90% of the home amount can be financed through Pag-IBIG
From ₱1,250,000.00 – ₱6,000,000.00 80% of the home amount can be financed through Pag-IBIG


One of the most appealing aspects of a Pag-IBIG loan is its affordability in comparison to other available products in the market. By using the Pag-IBIG Fund Housing Loan Affordability Calculator, you can estimate the amount you can borrow based on your income, repayment term, fixed pricing period, and the property value you are interested in.

To be eligible for a Pag-IBIG house loan, you need to be a member of Pag-IBIG and have contributed to the “Pag-IBIG Membership Program” for 24 months. If you have not yet reached this requirement, you have the option to make a lump sum payment for 24 months to qualify for the program. You also need to be under the age of 65, have no existing Pag-IBIG housing loan or outstanding multi-purpose loans, and must not have any previous Pag-IBIG loans that were foreclosed, canceled, or bought back due to default. Upon submitting all the necessary documents, you can expect to receive approval for your Pag-IBIG housing loan within 16 working days.

SSS Housing Loan

The SSS Housing Loan program, provided by the Social Security System, aims to offer affordable housing, home loan assumption, and home improvement opportunities to employed Filipinos. Although less popular than the Pag-IBIG Housing loan, the SSS Housing Loan has several advantages.

Through this program, you can obtain a loan to purchase a lot and build a new house, buy an existing residential property such as a house and lot, townhouse, or condominium, or construct a new house on a lien-free lot that you own.

The amount you can borrow under the SSS Housing Loan is up to ₱2,000,000.00, but the final sum depends on the lowest value of the following criteria: 70-90% of the appraised value of the property, your ability to repay the loan, and your need, which will be evaluated by the SSS based on the type of work and materials required.

The loan repayment term for the SSS Housing Loan is five years or multiples of five years, up to a maximum term of 30 years. The interest rates charged for this loan range from 8.0% to 11.0% per annum, based on the terms of the loan.

Loan Amount Interest Rate
Up to ₱450,000.000 8.0% per annum
From ₱450,000.00 – ₱1,000,000.00 9.0% per annum
From ₱1,000,000.00 – ₱1,500,000.00 10.0% per annum
From ₱1,500,000.00 – ₱2,000,000.00 11.0% per annum


To be eligible for an SSS Housing Loan, you need to fulfill certain requirements. Firstly, you must be a member of the SSS and a registered workers’ organization. Additionally, you must have paid at least 36 months of premium contributions and have 24 continuous contributions prior to your application. Furthermore, you cannot be over 60 years old when you apply, must not have been granted a previous SSS housing loan, and must not have received final SSS benefits in the past.

Bank Housing Loans

When it comes to financing a home loan, there are numerous banks to choose from. To start deciding where to get a bank loan, it is best to research various financial institutions that interest you or those that you are currently using. A home loan calculator can be used to estimate how much you could finance with a bank.

Banks have different interest rates and loan terms. You can use a bank loan to purchase a townhouse, condominium, vacant lot, or house and lot. It can also be used for construction and home renovations or to refinance your current home loan. The amount you can borrow will depend on your capacity to pay, and repayment terms will vary depending on the bank. Thorough research before signing any loan documents is essential.

Banks provide flexible financing options, and the amount they are willing to finance varies. Some banks offer 80% to 90% financing, while some offer as low as 70%. Interest rates also vary depending on the bank, the loan amount, and the loan tenure.

The qualifications for a bank loan are less strict. In most cases, a bank membership is not required, and there are no contribution requirements or savings accounts needed. You must be a Filipino citizen or have a Visa if you are a foreigner. Banks typically have quicker approval times than other home loan options, and completing your online home loan application can ensure fast approval.

To be approved for a bank loan, you must have a steady monthly income. The amount you qualify for and the rate you receive will depend on your capacity to pay. Online tools such as the HSBC Housing Loan Calculator can provide an idea of the type of financing you could receive from a bank compared to a Pag-IBIG Housing loan or SSS Housing Loan.

Which Home Loan Option Is Best For Me?

Purchasing a home is a significant achievement, and it’s important to make this time memorable rather than stressful. To achieve this, it is crucial to choose a home loan that suits your specific needs.

One excellent financing option for a straightforward home loan with a low interest rate and flexible payment terms is the Pag-IBIG Housing Loan. On the other hand, if you are a Filipino worker who is part of a registered worker’s organization, the SSS Housing Loan can offer low-cost housing options that would be highly beneficial.

If you prefer more flexibility with your home loan in terms of interest rate, payment term, and financing amount, a bank home loan might be the best option for you. However, it’s essential to remember to use a mortgage calculator while conducting research to determine the amount of financing you qualify for before looking for a house. This will assist in establishing expectations and determining the best financing option for your needs.

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