Ever wondered how banks and financing institutions come up with a monthly amortization figure for your home loan? There are several options for financing your home purchase – Pagibig, bank or in-house financing – but all these institutions use what is called a factor rate in computing your monthly amortization or what is commonly called monthly instalment. Your monthly amortization is made up of principal plus interest payments paid regularly over a specified period of time.

To compute for your monthly amortization, there are some information or data you have to have on hand:

1. Total Contract Price (TCP) of the property you are buying

2. Loanable Amount. Banks usually lend between 80% to 90% of the value of the property.

3. Down Payment (DP) or Equity required by the developer. Most developers usually require 20% down payment. Minimum equity is usually calculated from the total contract price (TCP) less loanable amount

MINIMUM EQUITY = TOTAL CONTRACT PRICE – LOANABLE AMOUNT

4. Interest Rate (IR). This is dictated by the institution that will finance your loan – Pag-IBIG, bank or developer for in-house financing.

5. Factor Rate which you can get from the following Factor Rate Table

Term (years) |
11.00% |
11.25% |
11.50% |

1 |
0.0883816585 | 0.0884983137 | 0.0886150539 |

2 |
0.0466078382 | 0.0467239917 | 0.0468403153 |

3 |
0.0327387171 | 0.0328572349 | 0.0329760064 |

4 |
0.0258455226 | 0.0259670980 | 0.0260890089 |

5 |
0.0217424231 | 0.0218673079 | 0.0219926074 |

6 |
0.0190340790 | 0.0191623721 | 0.0192911562 |

7 |
0.0171224364 | 0.0172541668 | 0.0173864608 |

8 |
0.0157084257 | 0.0158435836 | 0.0159793738 |

9 |
0.0146258610 | 0.0147644123 | 0.0149036603 |

10 |
0.0137750011 | 0.0139168947 | 0.0140595444 |

*To illustrate*

Let us assume you want to buy a condo unit with a total contract price of P2,500,000.00 through bank financing.

Number of years to pay : **10 years**

Interest Rate : *11.25%*

Loanable Amount : *P2,000,000.00*

Down Payment :* P500,000.00*

Factor Rate : ** 0.0139168947** (10 years, 11.25%)

Monthly Amortization = Loanable Amount X Factor Rate

= P2,000,000 X 0.0139168947

Monthly Amortization = *P 27,833.79 per month for 10 years*

There you have it. It’s quite simple to derive your monthly amortization once you have all the data on hand.

Or you can always use the Loan Amortization Calculator which you can find at the right hand side of this page. To use the Loan Amortization Calculator, just enter the following information:

Loan Amount

Interest Rate

Term (number of years to pay)

First Payment Date

And press “CALCULATE”

And you get your monthly amortization.

*Looking to buy a house or condo unit? *

*Or do you have property that you want to sell?*

*Contact me and let’s discuss how I can help you*

*Kathy Lacuna*

*Licensed Real Estate Broker*

*Mobile# +63 9154348928*

*Or send me a message here*

Thanks for finally talking about >How Do You Calculate Monthly Amortization on Your

Home Loan? | Your Home In The Philippines <Liked it!

You’re welcome!

i just want to ask if a member will apply a housing loan that is from a subdivision. how many days will it approve. im applying for it and the office of the said subdivision and developer try to convince me to go for abank loan. according to them its slow ang approval ninyo . is this true

Banks require more documentation and have more requirements, but once your papers are all complete and in order, approval is fast.

ohe numbers… i guess i can never have the time to understand this.lol i’ll just have to find someone to do this for me. tnx for this.

I’m the one who’s paying our housing loan in pag-ibig but never thought of computing it. Ahhh headache! 😀 Thanks for this tho, I need this in the future. 🙂

thanks for sharing this is why were scared to do a housing loan.. Its easy to get a house but im scared that we might not be able to afford the ammortizations

Honestly, I actually have a hard time analyzing how they compute housing loan. Your post is a good resource. Thanks for this.

Whoa! I never knew this. We mortgaged our house last year. Very interesting post, will figure out how my mom pay for our home loan.

Just use the loan amortization calculator and you’ll figure it out in no time 🙂

This is actually very helpful. I am not really fluent about finances but this one is definitely a good resource.

Very helpful article for this topic. I think people should know about this matter even though they won’t buy or mortgage a house & lot.

HI im buying this property from a friend wherei i will loan the balance of P3.5M. Can you help me compute if my options are the following.

4% per annum 5 and 10 years

or

5% per annum 5 and 10 years

is this computation what they call deminishing balance means interest imposed only on the remaining balance?

hope you can help me ty

You can use the Loan Amortization Calculator at the right hand side of this post. Just enter the loan amount, in this case 3500000; enter the interest rate, e.g. 4; term, e.g. 5 and just hit “Calculate”. This will compute for your annual and monthly amortization. For this example the monthly amortization is

P64,457.83.Try it out for the other variables. Let me know if you still need help and I will try to assist you.