Whether you're buying your first place, building on a lot you already own, or turning a spare room into a home office, there's a home loan built for the job. The trouble is that Philippine banks lend for several different purposes, and applying for the wrong type — or to the wrong bank — can cost you time, money, or an approval.
Here are the five main types of home loans you'll come across in the Philippines, what each one is for, and the things banks typically look for before they say yes.
1. Home purchase loan
This is the type most people mean when they say "home loan." It's used to acquire a property — a house and lot, a condominium unit, or a vacant lot.
In most cases, banks expect you to have already paid around 20% of the property's total value before they'll consider financing the rest. That's exactly why so many developers advertise the "20% down payment, move in agad" promo: you cover the 20%, and the bank pays the remaining 80% in full once your loan is approved.
If you're shopping for a home or eyeing a pre-selling unit, this is almost certainly the loan you're after.
2. Property construction loan
Already own a lot and want to build your dream home on it? A construction loan is designed for exactly that. It lets you fund the build — typically working with a construction or architectural firm to bring your design to life.
Because the lot itself secures the loan, banks generally require that the title is under the primary borrower's name. You'll usually also need to submit a Bill of Materials (BoM) and a floor plan before the bank will proceed, so the lender can see what's being built and what it will cost.
3. Refinancing loan
Refinancing is when you take out a new home loan to pay off an existing one you have with another bank. There are plenty of reasons people do it: to secure a lower monthly payment, to shorten the loan tenure, or to consolidate debt.
Done at the right time, refinancing can put real money back in your pocket — savings you can redirect to other goals. It's one of the most overlooked ways for Filipino homeowners to get off yesterday's rates, and Nook handles the entire takeout for you, comparing 20+ banks to find a sharper deal at no cost.
4. Home equity loan
A home equity loan is essentially a second mortgage on a property you already own. Instead of borrowing to buy, you borrow against the current value of your property to free up funds for other purposes — most often a business or an investment.
One thing worth knowing: in the Philippines, banks commonly add around a 1% premium on the interest rate for home equity loans. That means a standard mortgage calculator may not give you a fully accurate figure, so it's wise to confirm the real cost with a consultant before you commit.
5. Home improvement loan
Home improvement loans are for remodeling or renovating a home you already live in. If you're only upgrading part of the house — say, converting a room into a proper home office, as so many Filipinos did during the pandemic — this is often the more practical, lighter-weight option compared with a full purchase or construction loan.
So which home loan is right for you?
In short: a purchase loan to buy, a construction loan to build on land you own, a refinancing loan to replace an existing loan on better terms, a home equity loan to unlock the value already in your property, and a home improvement loan to renovate. Each comes with its own requirements and its own best-fit lenders.
That's where a broker earns its keep. Rather than applying to bank after bank yourself, Nook compares 20+ banks and matches you to the lender most likely to approve the right loan for your situation — and a dedicated consultant runs the whole application end to end, so you never visit a branch or fill in a bank form. Because the banks pay Nook once your loan is released, it's 100% free to you.