Worked Example
Can an OFW Afford a ₱5M House on a ₱120,000 Remittance?
A real scenario, computed with the same formulas the KayaKo simulator uses — not a rule of thumb. Enter your own numbers and yours will differ, but here's exactly how the math works.
Home & Condo
September 19, 2026
Quick answer
Yes, comfortably — for this specific scenario. Net DSR lands at 27.2%, well under the ~35% guideline lenders use, with room to spare even under a rate-stress scenario. The full breakdown is below, including what "comfortably" actually costs upfront.
The scenario
- Property: ₱5,000,000 house and lot
- Down payment: 20% (₱1,000,000)
- Loan: ₱4,000,000
- Financing: Pag-IBIG, 20-year term
- Income: ₱120,000/month remittance, already net of host-country tax (the KayaKo simulator asks for this specifically for OFWs — see our DSR guide for why)
Net income first
Philippine income tax doesn't apply to OFW foreign-sourced income (NIRC Sec. 23(C)) — but mandatory contributions still do, and OFWs pay the full rate themselves since there's no local employer to split it with:
SSS (15% of ₱35,000 MSC cap): ₱5,250
PhilHealth (5%, capped at ₱100,000 band): ₱5,000
Pag-IBIG (2%, capped): ₱200
Total mandatory deductions: ₱10,450/month
Net take-home: ₱120,000 − ₱10,450 = ₱109,550/month
Monthly payment and DSR
₱4,000,000 loan, 20 years, 6.5% (Pag-IBIG base case)
Monthly payment: ₱29,823
Net DSR = ₱29,823 ÷ ₱109,550 = 27.2%
27.2% is comfortably under the ~35% guideline. Even under Pag-IBIG's stress-case rate (7.0%), the payment rises to ₱31,012/month — DSR moves to 28.3%, still well within range.
Cash needed upfront — not just the down payment
Down payment (20%): ₱1,000,000
Documentary Stamp Tax: ₱30,000
Transfer Tax: ₱37,500
Registration Fee: ₱20,000
Notarial (1%, capped ₱50k): ₱50,000
Pag-IBIG processing fees: ₱5,000
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Total closing costs: ₱142,500
Total cash needed upfront: ₱1,142,500
That closing-cost figure surprises most first-time buyers — it's over the actual down payment amount you might budget for casually. Full breakdown of what each line item is for: Real Estate Documentation Guide.
Over the life of the loan
Total of all 240 monthly payments at the base 6.5% rate: ₱7,157,502 — meaning total interest paid over 20 years is ₱3,157,502, close to 79% of the original loan amount on top of what was borrowed. This is normal for a 20-year amortized loan, but worth seeing plainly rather than discovering later.