The Bangko Sentral ng Pilipinas (BSP) cut its policy rate by a cumulative 225 basis points between August 2024 and February 2026, from 6.50% to 4.25% — then reversed course and raised it three times, to 5.00% after its 27 August 2026 meeting, as inflation rose. Your housing-loan rate does not follow those moves one-for-one: banks price loans from their own funding costs plus margins, most loans are fixed for a period and only reprice at set dates, and the BSP’s own research finds only partial pass-through to housing loans. The practical trade-off for a buyer is that no one can tell you the rate you will pay at a future turnover, so the safer plan is one that still works if rates are two or three points higher.
Key points
- Policy rate as of 3 October 2026: 5.00% (target reverse repurchase rate). The next scheduled Monetary Board meeting is 22 October 2026.
- The easing cycle that the earlier version of this article described ended in February 2026; the BSP has raised rates by a cumulative 75 basis points since April 2026.
- Bank mortgage rates are not set by the BSP. Ask each lender for a dated rate sheet showing each fixing period.
- A fixed rate protects you only until repricing. Budget for the payment at a higher rate after the fixing period.
The policy rate, decision by decision
| Monetary Board decision | Change | Target RRP rate after | Effective (BSP daily table) |
|---|---|---|---|
| August 2024 to December 2025 (series of cuts) | −200 bps in total | 4.50% | by end-December 2025 |
| 19 February 2026 | −25 bps | 4.25% | 20 February 2026 |
| 23 April 2026 | +25 bps | 4.50% | 24 April 2026 |
| 18 June 2026 | +25 bps | 4.75% | 19 June 2026 |
| 27 August 2026 | +25 bps | 5.00% | 28 August 2026 |
Sources: BSP Monetary Policy Reports (February and August 2026) and the BSP’s daily target RRP table, checked 3 October 2026. Starting point before the August 2024 cut: 6.50%. Meeting dates for April and June are from the BSP’s 2026 policy calendar, matched to the rate changes in the daily table.
In its August 2026 Monetary Policy Report, the BSP explained the hikes as a pre-emptive response to rising inflation: its central forecast put average 2026 inflation at 6.1%, against a target of 3.0% with a tolerance band of one percentage point either side, citing oil prices, the Middle East conflict, possible El Niño effects on food prices and wage adjustments. The same report noted that most surveyed analysts expected further increases during the rest of 2026. Those are expectations, not commitments — the Monetary Board decides at each meeting.
Why your mortgage rate moves differently
The target RRP rate is the rate at which the BSP absorbs short-term liquidity from banks. It influences what banks pay for funds, but a housing loan is a long-term retail product priced on top of that:
- Cost of funds: deposits, borrowings and the bank’s internal transfer price for long-term money.
- Spread: a margin for credit risk, operating costs, capital and competition. Spreads differ by bank, borrower profile, loan size and property type.
- Fixing period: banks commonly let you fix the rate for one to several years. A longer fix usually carries a different rate from a shorter one.
- Repricing: when the fixed period ends, the rate resets to the bank’s prevailing rate for the next period, set by the method in your loan documents.
The BSP measured this in a study published in its February 2026 Monetary Policy Report, using weekly bank data from 2020 to 2025. It found pass-through from the policy rate to corporate lending rates was stronger than to consumer lending rates, and estimated only partial long-run pass-through to housing loans. In other words, when the BSP cut by 225 basis points, it would have been unusual for housing-loan rates to fall by the same amount — and the same logic applies on the way up.
The earlier version of this article quoted bank rates of “7% to 10%”, a digital lender’s “5.99%” and a Pag-IBIG “3%” program rate. We could not verify those figures against dated lender or Pag-IBIG publications on 3 October 2026, so they have been removed. Published rates change often; ask each lender, and Pag-IBIG, for the current rate for each fixing period in writing.
What the 2026 hikes mean in your situation
| Your situation | What to check |
|---|---|
| Existing loan, still inside its fixed period | Your payment does not change until the repricing date. Note that date and how the new rate will be set. |
| Loan repricing in the next year | The new rate will reflect the bank’s rates at that date. Ask early which fixing periods will be offered and whether partial prepayment is allowed at repricing without penalty. |
| Buying ready-for-occupancy now | Compare fixing periods and total cost across lenders, not just the first-year rate. Ask what happens after the fixed period. |
| Buying pre-selling, loan at turnover in 2–5 years | Today’s rates tell you little about your turnover rate. Plan with a range and keep a cash buffer for the balance. |
Stress-testing a loan
A ₱3,000,000 housing loan. The table shows the monthly principal-and-interest payment at different rates. Each one-point rise in the rate adds roughly ₱1,750–₱1,950 a month on a 20-year term.
| Interest rate (assumed) | 15 years | 20 years |
|---|---|---|
| 6% | ₱25,316 | ₱21,493 |
| 7% | ₱26,965 | ₱23,259 |
| 8% | ₱28,670 | ₱25,093 |
| 9% | ₱30,428 | ₱26,992 |
| 10% | ₱32,238 | ₱28,951 |
Payments exclude mortgage redemption insurance, fire insurance and association dues.
Repricing example: the same ₱3,000,000 loan over 20 years, fixed at 7% for three years (₱23,259 a month), has about ₱2,770,000 left after 36 payments. If it then reprices for the remaining 17 years, the payment becomes about ₱21,692 at 6%, ₱24,882 at 8%, ₱26,559 at 9% or ₱28,288 at 10%. The direction of rates over the next few years is what decides which of those you pay.
Questions to ask before you sign
- What rate applies to each fixing period, and on what date was the rate sheet issued?
- At repricing, how is the new rate determined, and can I choose a different fixing period?
- Are partial prepayments or full refinancing allowed without penalty, and only on repricing dates?
- For a pre-selling purchase: when will the loan be processed, and what happens under my contract if approval comes late or for less than the balance?
- Could I still afford the payment if the rate were two to three points higher at repricing?
For how approval, appraisal and the turnover balance fit together, see our guide to bank financing for a Cebu condo.
Frequently asked questions
What is the BSP policy rate as of 3 October 2026?
5.00%. The Monetary Board raised the target reverse repurchase (RRP) rate by 25 basis points at its 27 August 2026 meeting, effective the next day in the BSP’s daily rate table. The next scheduled policy meeting in the BSP’s 2026 calendar is on 22 October 2026.
If the BSP raises rates, does my housing loan payment go up right away?
Usually not, if your rate is fixed. Most bank housing loans fix the rate for a chosen period; the payment changes when the loan reprices at the end of that period, at the bank’s prevailing rate then. Check your loan documents for the repricing date and how the new rate is set.
Why didn’t mortgage rates fall as much as the BSP’s 225 basis points of cuts?
Bank lending rates reflect each bank’s cost of funds plus margins for risk and costs, and loans already in a fixed period do not change. A BSP study in its February 2026 Monetary Policy Report found that policy-rate changes pass through more strongly to corporate loans than to consumer loans, with only partial long-run pass-through to housing loans in the 2020–2025 data.
I am buying pre-selling with turnover in a few years. What rate should I plan for?
Nobody can tell you. Plan with a range rather than a single rate: work out the payment at a rate you consider likely and at two or three percentage points higher, and make sure the higher figure still fits your budget. The mortgage calculator lets you try your own numbers.
Plan the loan before the turnover date
Tell us the project and unit you are considering. We will prepare a dated computation of the balance due at turnover and the monthly amortization at several interest rates, so you can see how much room your budget has if rates are higher than today.
Request a rate-range computation WhatsApp +63 917 550 8229Sources and notes
- BSP — Target RRP rate, daily table (2026) — 2026 rate changes effective 20 Feb (4.25%), 24 Apr (4.50%), 19 Jun (4.75%) and 28 Aug (5.00%); 5.00% on 1–2 October 2026
- BSP — Monetary Policy Report, February 2026 — 19 February 2026 cut to 4.25%; policy rate at 4.5% by end-December 2025 after 200 bps of cuts since August 2024; study on pass-through to bank lending rates (weekly data, 2020–2025)
- BSP — Monetary Policy Report, August 2026 — 27 August 2026 hike to 5.0%; 2026 average inflation forecast of 6.1%; 2026 meeting calendar; inflation target 3.0% ± 1.0 percentage point
- Illustration and assumptions — ₱3,000,000 loan; interest rates of 6%–10% and the 3-year fixing scenario are assumptions, not offers from any lender; payments use the standard amortization formula and exclude insurance