Monthly amortisation on a Pag-IBIG loan
The Pag-IBIG Fund is the Philippine government housing programme, and its loans are priced below commercial banks for members who qualify. This calculator gives the monthly amortisation and the total interest across the term.
The formula
Worked example: ₱1,000,000 at 6.25% over 20 years
- Monthly amortisation: ₱7,309.28
- Total interest: ₱754,228
- Total paid: ₱1,754,228
Interest comes to three quarters of the amount borrowed. That is what twenty years does even at a subsidised rate.
Rate depends on the fixing period
Pag-IBIG offers the rate fixed for a chosen number of years, after which it is repriced. A shorter fixing period carries a lower rate; a longer one costs more but removes the repricing risk.
| Fixed for | Indicative rate | Monthly on ₱1,000,000 / 20 yrs |
|---|---|---|
| 3 years | ~5.75% | ~₱7,020 |
| 5 years | ~6.25% | ₱7,309 |
| 10 years | ~7.00% | ~₱7,753 |
| 20 years | ~8.00% | ~₱8,364 |
The difference between a 3-year and a 20-year fix is over ₱1,300 a month. The shorter fix wins if rates hold or fall; the longer one wins if they rise, and nobody knows which.
Eligibility and limits
Borrowers need at least 24 monthly contributions, must be under 65 at application and under 70 at maturity, and the loan is capped at ₱6,000,000. The amortisation should not exceed roughly 35% of gross monthly income, which on the example above implies income near ₱21,000 a month.
What this calculator leaves out
Mortgage redemption insurance and fire insurance, both required and added to the monthly figure; processing fees; and the repricing that applies once the fixed period ends.
Paying early
Pag-IBIG allows partial and full prepayment without penalty on most products. An extra ₱2,000 a month on the example loan clears it around six years early and saves roughly ₱230,000 of interest.
Because amortisation front-loads interest, the saving is far larger for prepayments made in the first five years than for the same amount paid in year fifteen. If income allows, the early years are the ones to overpay.
Comparing with a bank loan
Commercial banks in the Philippines typically price housing loans one to three points above Pag-IBIG for the same fixing period. On ₱1,000,000 over 20 years, a bank at 8% costs ₱8,364 a month against ₱7,309 — about ₱1,055 a month and ₱253,000 over the term.
Banks may offer higher loan amounts, faster processing or a longer maximum term, which can outweigh the rate for some borrowers. For most members who qualify, Pag-IBIG remains the cheaper route.
Term against amortisation
Stretching the loan to 30 years drops the monthly figure to about ₱6,157 but raises total interest to roughly ₱1,216,000 — an extra ₱462,000 for ₱1,152 a month of relief.
Shortening to 15 years raises the amortisation to ₱8,574 and cuts interest to about ₱543,000. The term is the lever that moves the total most, and the one most borrowers set once and never revisit.
Related calculators
- Home loan EMI calculator — the same arithmetic for other markets
- Loan balance calculator — the outstanding figure at any point
- Debt-to-income — the 35% test in detail