Mortgage Loan Agreement (Philippines)
MORTGAGE LOAN AGREEMENT
This Mortgage Loan Agreement ("Agreement") is entered into on [Agreement Date], by and between:
LENDER (MORTGAGEE): [Lender Name], with address at [Lender Address], BIR TIN [Lender T I N] (hereinafter "Lender");
BORROWER (MORTGAGOR): [Borrower Name], with address at [Borrower Address], BIR TIN [Borrower T I N] (hereinafter "Borrower").
1. LOAN AMOUNT AND DISBURSEMENT
1.1 Loan Amount. The Lender agrees to lend to the Borrower the principal sum of PHP ₱[Loan Amount] (hereinafter "Loan"). The Lender shall disburse the Loan on [Disbursement Date] via [Disbursement Method] to [Borrower Bank Details].
1.2 Interest Rate. The Loan shall bear interest at [Annual Interest Rate] on the outstanding principal balance, computed and charged monthly.
2. REPAYMENT TERMS
2.1 Amortization Schedule. The Borrower shall repay the Loan in [Loan Term Months] equal monthly amortization payments of PHP ₱[Monthly Amortization] each, commencing on [First Payment Date] and due on the [Payment Due Day]th day of each succeeding month.
2.2 Late Payment Penalty. Any monthly amortization not paid on its due date shall be subject to a penalty charge of [Penalty Rate]. Failure to pay [Default Threshold] or more consecutive monthly amortizations constitutes an event of default.
2.3 Acceleration. Upon default, the entire outstanding principal balance, accrued interest, and penalties shall become immediately due and payable at the Lender's option without further notice or demand.
3. REAL ESTATE MORTGAGE
3.1 Grant of Mortgage. As security for the full and faithful payment of the Loan and all interest, penalties, and charges thereon, the Borrower hereby MORTGAGES, PLEDGES, and HYPOTHECATES unto and in favor of the Lender the following real property ("Mortgaged Property"): [Tct Number], described as [Property Description], registered at the [Registry Of Deeds].
3.2 Registration. This real estate mortgage shall be registered with the [Registry Of Deeds] under Presidential Decree No. 1529 (Property Registration Decree) to annotate the Lender's lien on the TCT/CCT. Registration costs, Documentary Stamp Tax under Section 195 of the NIRC (RA 8424) at PHP 20 per PHP 5,000 of Loan amount, and Registry of Deeds registration fees shall be borne by the Borrower.
3.3 Representations. The Borrower warrants that the Mortgaged Property is free from all prior mortgages, liens, encumbrances, and adverse claims except as disclosed. The Borrower shall maintain property insurance on the Mortgaged Property for not less than the outstanding Loan balance, with the Lender as co-insured.
3.4 Foreclosure. Upon default, the Lender may foreclose this mortgage extrajudicially under Act No. 3135 (as amended by Act No. 4118) by filing a Petition for Extrajudicial Foreclosure with the Executive Judge of the Regional Trial Court having jurisdiction over the property location, or judicially under Rule 68 of the Rules of Court. The Borrower expressly authorizes extrajudicial foreclosure under Act 3135.
3.5 Release of Mortgage. Upon full payment of the Loan and all interest and charges, the Lender shall execute a Deed of Cancellation of Mortgage within fifteen (15) days of full payment, enabling the Borrower to remove the mortgage annotation from the TCT/CCT at the Register of Deeds.
4. GENERAL PROVISIONS
This Agreement is governed by the Civil Code of the Philippines (RA 386), Articles 2085–2123 (Mortgage), Act No. 3135 (Extrajudicial Foreclosure), PD 1529 (Property Registration Decree), and the National Internal Revenue Code (RA 8424 as amended). For institutional lenders, BSP regulations under the General Banking Law (RA 8791) and the Truth in Lending Act (RA 3765) apply. Any dispute shall be submitted to the proper courts of competent jurisdiction where the Mortgaged Property is situated.
IN WITNESS WHEREOF, the parties have affixed their signatures on [Agreement Date] at ______________________, Philippines, before a Notary Public.
Lender (Mortgagee) / Authorized Representative
________________
Signature
Borrower (Mortgagor)
________________
Signature
Witness
________________
Signature
What Is a Mortgage Loan Agreement (Philippines)?
A Mortgage Loan Agreement in the Philippines sets out the conditions on which money is lent, including the rate of interest, any security taken and what happens on default.
Under Article 2125 of the Civil Code, the REM must be in a public document (notarized before a notary public under the 2004 Rules on Notarial Practice) and must be registered with the Register of Deeds to be valid against third parties. Presidential Decree No. 1529 (Property Registration Decree) governs the registration process: the mortgagee presents the notarized REM, together with the Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) of the mortgaged property, and the Register of Deeds annotates the mortgage on the back of the title, creating constructive notice to all persons dealing with the property.
For government housing loans, Pag-IBIG Fund (HDMF) is the largest Philippine mortgage lender under Republic Act No. 9679 (Home Development Mutual Fund Law of 2009), providing Pag-IBIG Housing Loans to qualified members for property acquisition and construction. The Social Security System (SSS) and Government Service Insurance System (GSIS) also provide housing loans to their respective members secured by REMs. Commercial banks, thrift banks (including savings banks and private development banks licensed by BSP), and other financial institutions originate mortgage loans in the private market.
Upon default of the mortgage loan, Act No. 3135 (as amended by RA 4118) provides for extrajudicial foreclosure of the REM through a public auction sale at the Office of the Clerk of Court of the RTC in the province or city where the property is located, upon at least 20 days notice published in a newspaper of general circulation. The mortgagee may bid at the foreclosure sale. The mortgagor has a statutory right of redemption under Act No. 3135, Section 6 — for non-bank individual mortgagees — within 1 year from registration of the certificate of sale, or — for banks under the General Banking Law (RA 8791), Section 47 — within 1 year (or until registration of the final deed of sale, whichever is earlier) for juridical persons and 1 year for natural persons.
When Do You Need a Mortgage Loan Agreement (Philippines)?
A Mortgage Loan Agreement in the Philippines is needed whenever a borrower uses real property as collateral for a loan, giving the lender the right to foreclose the property if the borrower defaults.
A Mortgage Loan Agreement is needed when a homebuyer purchases real property with borrowed funds from a bank, thrift bank, or Pag-IBIG Fund — the lender requires both a promissory note (evidence of the debt obligation) and a Real Estate Mortgage (security over the purchased property) before releasing the loan proceeds to the seller or developer.
A Mortgage Loan Agreement is needed when a property owner needs a substantial loan — for business capital, medical expenses, or debt consolidation — and uses their house and lot, agricultural land, commercial building, or condominium unit as collateral to obtain a larger loan amount or lower interest rate than unsecured loans would provide.
A Mortgage Loan Agreement is needed when a real property developer borrows from a bank to finance construction of a subdivision or condominium project, securing the construction loan with a mortgage over the land being developed — a common arrangement known as a project development loan, subject to BSP Circular No. 600 on real estate exposure limits.
A Mortgage Loan Agreement is needed when a borrower refinances an existing mortgage loan — taking a new loan from a different lender to pay off the old mortgage — requiring the cancellation of the existing REM annotation and the registration of a new REM in favor of the new lender at the Register of Deeds.
A Mortgage Loan Agreement is needed when a private individual lends a substantial sum to a relative, friend, or business associate and requires real property as security — a private mortgage — to protect the lender's interest if the borrower becomes unable to repay, without the complexity and institutional requirements of a bank mortgage transaction.
What to Include in Your Mortgage Loan Agreement (Philippines)
A valid Mortgage Loan Agreement in the Philippines consists of the Loan Agreement provisions and the Real Estate Mortgage deed, and must contain the following essential elements for the mortgage to be valid against third parties and enforceable upon default.
Loan Terms: Principal amount in PHP ₱, interest rate, repayment schedule (monthly amortization amounts and due dates), maturity date, and prepayment provisions. For Pag-IBIG housing loans, the amortization schedule provided by HDMF is incorporated by reference. For bank mortgage loans, the Truth in Lending Act (RA 3765) requires disclosure of the effective APR before loan consummation.
Mortgaged Property Description: The exact description of the real property being mortgaged, including: Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) number; lot number, block number, survey/plan number; area in square meters; complete address; and assessed value per the latest Tax Declaration from the City or Municipal Assessor's Office. For condominium units, state the Condominium Certificate of Title (CCT) number and the unit's location within the building.
Mortgagor's Warranties: Representations by the property owner (mortgagor) that: the property is free from prior encumbrances or liens (other than those disclosed); the mortgagor has full legal title and authority to mortgage the property; the TCT/OCT is genuine and registered at the Register of Deeds; real property taxes are current; and there are no pending ejectment cases or boundary disputes.
Default and Foreclosure Clause: The events triggering the lender's right to foreclose — non-payment of installments, breach of insurance obligation, unauthorized transfer of the mortgaged property — and the foreclosure procedure under Act No. 3135 (extrajudicial foreclosure) or Rule 68 of the Rules of Court (judicial foreclosure). For bank mortgages, Section 47 of RA 8791 (General Banking Law) governs redemption rights.
Redemption Right: The mortgagor's statutory right to redeem the foreclosed property within 1 year from registration of the Certificate of Sale at the Register of Deeds for non-bank mortgagees under Act No. 3135, Section 6, or as modified for bank mortgagees under Section 47 of RA 8791 for juridical-person borrowers.
Insurance Requirement: The borrower's obligation to maintain adequate fire and casualty insurance on the mortgaged property, with the mortgagee named as beneficiary (loss payable clause). Banks require mortgage redemption insurance (MRI) to cover the loan balance upon the borrower's death, and property insurance under standard bank mortgage conditions.
Registration and Notarization: The REM must be notarized before a Philippine notary public under Article 2125 of the Civil Code and registered at the Register of Deeds under PD 1529 before it binds third parties. The BIR stamps the document and assesses documentary stamp tax under Section 195 of the NIRC (PHP 15 per PHP 1,000 of the loan amount for mortgage deeds). The forms-legal.com Mortgage Loan Agreement (Philippines) template covers the mandatory elements under Civil Code of the Philippines (RA 386), Art. 1933.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Mortgage Loan Agreement (Philippines) (Philippines) [Legal document template]. Forms Legal. https://forms-legal.com/philippines/financial/loans/mortgage-loan-agreement-philippines
"Mortgage Loan Agreement (Philippines) (Philippines)." Forms Legal, 2026, https://forms-legal.com/philippines/financial/loans/mortgage-loan-agreement-philippines.
@misc{formslegal-mortgage-loan-agreement-philippines,
author = {{Forms Legal}},
title = {Mortgage Loan Agreement (Philippines) (Philippines)},
year = {2026},
howpublished = {\url{https://forms-legal.com/philippines/financial/loans/mortgage-loan-agreement-philippines}},
note = {Free legal document template. Based on Civil Code of the Philippines (RA 386), Art. 1933}
}
Frequently Asked Questions
Obtaining a mortgage loan in the Philippines involves several steps. First, the borrower submits a loan application to a bank, thrift bank, or Pag-IBIG Fund with supporting documents: government-issued ID, proof of income (payslips or ITR), property documents (TCT/OCT, Tax Declaration, vicinity map, lot plan), and for employed borrowers, a Certificate of Employment with compensation. The lender orders an appraisal of the property by an in-house or accredited independent appraiser — mortgage loans in the Philippines are typically limited to 80-90% of the appraised value (loan-to-value ratio). Upon loan approval, the lender issues a letter of approval stating the approved amount, interest rate, term, and monthly amortization. The borrower and lender execute the Promissory Note and Real Estate Mortgage (REM) deed before a notary public. The REM is registered at the Register of Deeds — the borrower pays documentary stamp tax (DST) under Section 195 of the NIRC at PHP 15 per PHP 1,000 of loan amount, registration fees, and annotation fees. The lender retains the owner's duplicate copy of the TCT/OCT with the mortgage annotation until the loan is fully paid. Pag-IBIG Fund housing loans under RA 9679 follow a similar process with standardized forms and HDMF-prescribed documentation.
A mortgagor in the Philippines retains the right to redeem the foreclosed property within a statutory period after an extrajudicial foreclosure sale under Act No. 3135 (as amended by RA 4118). For private (non-bank) mortgagees, the mortgagor has 1 year from the date of registration of the Certificate of Sale at the Register of Deeds within which to redeem the property by paying the foreclosure sale price plus interest, costs, and expenses. For bank mortgagees, Section 47 of the General Banking Law (RA 8791) provides a modified redemption period: for natural persons, 1 year from the registration of the certificate of sale; for juridical persons (corporations), the right of redemption expires upon registration of the certificate of foreclosure sale with the applicable Register of Deeds, but not earlier than 3 months from foreclosure (whichever is later). During the redemption period, the mortgagor retains possession of the property and may collect income from it. The mortgagor may also challenge the foreclosure sale in court if proper notice requirements under Act No. 3135 were not followed. After the redemption period expires without redemption, the purchaser (typically the bank) obtains a final deed of sale and consolidates ownership in their name.
A Real Estate Mortgage (REM) in the Philippines is subject to Documentary Stamp Tax (DST) under Section 195 of the National Internal Revenue Code (NIRC, as amended by TRAIN Law RA 10963). The DST on a mortgage deed is PHP 15 for every PHP 1,000 (or fractional part thereof) of the loan amount secured by the mortgage. The DST is paid by the borrower-mortgagor and must be paid to the BIR before the mortgage can be registered at the Register of Deeds. For a PHP 5,000,000 mortgage loan, the DST is 5,000 × PHP 15 = PHP 75,000. In addition to DST, the Register of Deeds charges registration fees based on the loan amount under Presidential Decree No. 1529 and the Land Registration Authority (LRA) fee schedule. If the mortgage is eventually foreclosed and the property is sold at foreclosure, the purchaser (including the foreclosing bank) may need to pay capital gains tax (CGT) under Section 24(D) of the NIRC — 6% of the higher of the gross selling price or the fair market value (BIR zonal value) — upon issuance of the final deed of sale after the redemption period. Transfer taxes payable to the local government unit (LGU) under the Local Government Code also apply upon consolidation of ownership.
A property encumbered by a Pag-IBIG Fund housing loan Real Estate Mortgage (REM) can be sold, but the sale requires the prior written consent of Pag-IBIG Fund (HDMF) under the terms of the standard Pag-IBIG mortgage agreement, which prohibits the borrower from selling, transferring, or otherwise disposing of the mortgaged property without the Fund's approval. If the buyer agrees to assume the existing Pag-IBIG loan — a process called assumption of mortgage — Pag-IBIG evaluates the buyer's qualifications and creditworthiness before approving the transfer. The buyer must be a Pag-IBIG member in good standing and must qualify under Pag-IBIG's housing loan requirements. Upon approval, Pag-IBIG executes an Assumption of Mortgage Agreement and updates the loan account in the buyer's name. Alternatively, the seller may fully pay the outstanding Pag-IBIG loan from the sale proceeds, obtain a Release of Real Estate Mortgage from HDMF, cancel the REM annotation at the Register of Deeds, and then execute a clean Deed of Absolute Sale to the buyer. Selling a Pag-IBIG-mortgaged property without HDMF consent exposes the seller to breach of the mortgage contract and potential foreclosure proceedings by HDMF.
A Mortgage Loan Agreement (Philippines) does not legally require a lawyer in Philippines, and individuals and businesses may draft and execute the document independently. The Civil Code of the Philippines (RA 386), Art. 1933 does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Philippines lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Supreme Court of the Philippines has jurisdiction over disputes arising from this type of document, and Securities and Exchange Commission (SEC Philippines) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Loan Agreement (Philippines)
A Loan Agreement for the Philippines under the Civil Code Articles 1933-1961 and the Negotiable Instruments Law (Act No. 2031), governing a personal or commercial loan between private parties. Covers loan amount, interest, repayment, collateral, default, and remedies.
Promissory Note (Philippines)
A Promissory Note for the Philippines under the Negotiable Instruments Law (Act No. 2031) and Civil Code Articles 1953-1961, evidencing a borrower's unconditional written promise to pay a fixed sum to a lender on a specified date. Covers principal, interest, maturity, default, and notarization.
Guarantee Agreement (Philippines)
A Guarantee Agreement for the Philippines under Civil Code Articles 2047-2084, where a guarantor promises to pay a creditor if the principal debtor defaults. Covers the nature of guaranty (subsidiary liability), benefit of excussion, waiver provisions, and the guarantor's rights of reimbursement and subrogation.