Home Development Mutual Fund/Pag-IBIG Fund(HDMF)

03 May 2021 Dear MS. LYNDALLE A. GARCIA, This refers to your eFOI request received on 20 April 2021 sent to the eFOI portal of the Home Development Mutual Fund (Fund) wherein you inquired about the following: 1. If there are pre-termination charges in our Housing Loans (HL); 2. If you opt on paying off part of the principal amount, will interest charges or term be adjusted; and 3. What is the effect of the outstanding balance should the debtor wish to pay off part of the principal amount and continue with the monthly amortizations. Our Office deemed it proper to raise this matter to and confer with the operating unit concerned – the Housing Operations Support Unit (HOSU). Our HOSU answered your questions as follows: 1. The Fund does not have pre-termination charges for regular full payment of HL accounts. However, a service fee shall be charged to borrowers who fully pay their HL accounts though the availment of refinancing facility with other financial institutions. 2. In case the borrower opted to pay an amount applied to principal, the interest rate, term and amortization shall be retained. However, the computation of interest on the remaining term of the loan shall be based on the outstanding balance. In effect, the loan term is shortened. 3. Regarding the effect of the outstanding balance should the debtor wish to pay off part of the principal amount and continue with the monthly amortization, as discussed above (No. 2), in effect, the loan term is shortened since the interest is computed based on the outstanding balance. Since the outstanding balance is lower, a lesser interest will be charged to the account. For further concerns, you may contact Ms. Leah E. Gannaban, Loans Operations Sector of the Housing Operations Support Unit, at [email protected] and/or through (02)8422-3000 local 5076. Thank you. Very truly yours, ATTY. MARCIAL C. PIMENTEL, JR. Head, Compliance Office and Vice President, Legal and General Counsel Group