THERE is a certain satisfaction to be had when a Filipino family finally buys its first home. OFWs (overseas Filipino workers), young professionals, small business owners, long-term renters ― all of them have at one point or another considered what it would be like to set foot in a house they own. That life event, however, might seem out of reach during times marked with high inflation, interest rate hikes, and a decidedly poor condominium market outlook. It doesn’t have to be that way. Home ownership is still possible with the right preparation, and the right financial backer.
Here are a few good rules to follow:
Set your budget and canvas your target properties carefully. If you will borrow to buy, try to aim for an amortization that is 25 to 30 percent of your net monthly income. Anything higher may strain your finances. If you have cash, pay in cash. Some sellers give significant discounts if you pay upfront. Just be sure you do not need that cash for other important things such as education or healthcare. Also be sure to check the cost of moving to your target home, as well as the cost of living there. Moving to a central business district might lower transport costs, but it could significantly raise your food, utility, and even education expenses. Cover all bases to protect your budget.
Satisfy your housing needs, not wants. Buying expensive homes can wreck your budget and lead to loan defaults down the line. Find a property type, location, size, and price that suits your needs. If a condo is big enough, in the right location, by all means buy. If a townhouse or detached home fits the bill, go for it. Your needs are what matter. Market conditions might favor one property over another, but that does not mean the property will be ideal for you. Make sure the price and eventual amortization costs and financing fees are always within your budget.
Set aside actual cash for a significant downpayment. If you can’t buy with cash, always make a significant downpayment. Twenty percent of the total property cost is what banks generally follow. Go higher if you can afford it. A big downpayment does two things. It lowers the amount the buyer needs to borrow to make the purchase, reducing interest expenses as well as the monthly amortization which your family budget will have to absorb. It also assures the bank or lending partner that the buyer has fully committed to the purchase, lessening the chances of a loan default while raising the chances for your loan to be approved.
Study loan options carefully. Look for loans with low interest rates which can be fixed for longer periods. Also check for loans which allow you to make large payments on principal without excessive fees. This will help lower interest expenses over the long term through principal payments whenever a cash windfall like a mid-year or year-end bonus comes around. Visit any bank to ask about home loans and how to make them work for you. Banks will compete for your attention, and that should lead to the best loan possible. But do not apply to a lot of banks as there are non-refundable fees involved, and those can add up. The whole banking sector has a duty to help Filipino families understand and use the formal banking system and its products for their needs. Find a bank that is easy to work with and listens to your needs.
Be wary of whom you are dealing with. Interesting times such as these often lead to desperate parties taking desperate measures. Check if sellers own or have custody of the property they are offering. Visit the sites, review ownership and taxation documents, and submit the property to third party appraisal. Deal with a licensed real estate broker. Ask for their Professional Regulation Commission (PRC) credentials and check them against the PRC’s website. Do not take anything for granted.
Always pay attention to the BSP (Bangko Sentral ng Pilipinas). The BSP is the regulator of the Philippine banking system, so everything the BSP says matters. BSP policy shifts such as interest rate decisions can directly impact your borrowing costs for better or for worse. Listen to the news for BSP monetary policy adjustments and talk to your bank regularly about how those adjustments might affect your loan.
Don’t let current market conditions get in the way of home ownership dreams. Just be sure to take the necessary precautions to ensure those dreams do not turn into nightmares.
Warren Augustus D. De Guzman is a Registered Financial Planner of RFP Philippines. To learn more about personal financial planning, attend the 117th RFP program this August 2026. Email [email protected] or visit rfp.ph to learn more about the program.