I. Introduction

In the Philippines, notarization plays a crucial role in real estate transactions, especially those involving loan and mortgage agreements. A notarial act transforms a private document into a public instrument, granting it legal authenticity and evidentiary weight. For real estate loan agreements, notarization is not merely a formality—it ensures enforceability and public recording, and protects the interests of both lender and borrower.

This article comprehensively discusses notary fees, their legal basis, governing rules, and practical considerations related to real estate loan and mortgage agreements in the Philippine context.

II. Legal Basis for Notarization

The legal framework governing notarization and notarial fees in the Philippines includes:

The 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC) – Issued by the Supreme Court, this rule prescribes the conduct of notaries public, the requirements for notarization, and the scope of their authority.
Civil Code of the Philippines – Articles 1357 and 1358 require certain contracts, such as those involving immovable property or creating real rights, to be in a public instrument to affect third parties.
Notarial Commission and Regulation by the Supreme Court – Notaries public are appointed by the Executive Judge of the Regional Trial Court with jurisdiction over the applicant’s principal place of business or residence.
Local Government Code and Ordinances – Some cities or municipalities impose additional guidelines or recommend maximum notarial rates.

III. Importance of Notarization in Real Estate Loan and Mortgage Agreements

A real estate loan mortgage agreement typically involves two primary documents:

The Loan Agreement – The contract that sets the terms of the loan between the lender and borrower.
The Real Estate Mortgage (REM) – The instrument that secures the loan with real property.

Under Philippine law, the REM must be notarized to:

Convert it into a public document, making it admissible in court without further proof of authenticity.
Allow its registration with the Registry of Deeds, a necessary step to make the mortgage binding upon third parties.
Comply with the Statute of Frauds and related formalities for contracts involving immovable property.

Failure to notarize the mortgage deed renders it a private document, which cannot be registered and offers limited protection.

IV. Notarial Fees: Legal Guidelines and Typical Rates

A. Legal Basis for Fees

The Rules on Notarial Practice authorize notaries public to charge reasonable fees for their services, but these must be displayed conspicuously in their offices. Although there is no nationwide uniform rate, the Integrated Bar of the Philippines (IBP) and local ordinances often recommend fee ranges to avoid abuse or overcharging.

B. Typical Notarial Fee Ranges

As of recent practice, notarial fees for real estate loan and mortgage documents in the Philippines typically range as follows:

Type of Document	Typical Fee Range (PHP)	Notes
Real Estate Mortgage Agreement	₱500 – ₱2,000	May increase depending on loan amount or property value
Loan Agreement	₱300 – ₱1,000	Separate from the mortgage deed
Acknowledgment with Multiple Copies	+₱100 – ₱200 per copy	For duplicate originals required by bank or borrower
Comprehensive Transaction Packages (Loan + REM + SPA)	₱1,500 – ₱5,000	For bundled notarization and coordination

Banks or lending institutions may absorb the notarial cost or pass it on to borrowers as part of the loan processing or documentation fees.

V. Factors Affecting Notarial Fees

Several factors can influence the notarial fee for a mortgage or loan agreement:

Complexity and number of pages – Multi-page contracts, annexes, or technical descriptions of properties may increase the rate.
Location and notary’s standing – Fees in Metro Manila and major cities are generally higher than in provincial areas.
Loan amount or property value – Some notaries apply percentage-based fees for high-value transactions.
Additional certifications or attachments – Special powers of attorney, affidavits of ownership, or consent forms add to the total.
Travel or mobile notarization – When the notary travels to the client, a “service call” fee may be charged.

VI. Limits and Ethical Rules on Notary Fees

Notaries are officers of the law and must comply with ethical standards:

Overcharging may result in administrative sanctions by the Supreme Court or IBP.
Failure to post fee schedules violates the Notarial Practice Rules.
Unauthorized notarization (e.g., outside territorial jurisdiction or without personal appearance) can invalidate the document and expose the notary to disciplinary action.

Clients are entitled to request an official receipt and verify the notary’s valid commission with the local RTC.

VII. Relationship with Registration and Other Charges

After notarization, the Real Estate Mortgage must be registered with the Registry of Deeds to be effective against third parties. Registration involves:

Registration Fees – Computed as a percentage of the loan or mortgage amount (often 0.25% to 0.5%).
Documentary Stamp Tax (DST) – Usually ₱20 for every ₱5,000 of the loan principal, under the National Internal Revenue Code.
BIR Certification and Transfer Fees – If applicable to collateral substitution or new encumbrance entries.

These are separate from notary fees, but together they form part of the loan documentation costs borne by borrowers or lenders.

VIII. Best Practices for Borrowers and Lenders

Engage only authorized notaries – Verify the notary’s commission and jurisdiction.
Ensure personal appearance – The signatories must personally appear before the notary.
Retain notarized copies – Each party should receive an original notarized copy bearing the notary’s seal and entry number.
Clarify inclusion in bank fees – Borrowers should check whether notarial and registration fees are already included in the loan charges.
Record properly – Confirm that the mortgage is annotated on the title to secure the lender’s rights.

IX. Conclusion

Notary fees for real estate loan and mortgage agreements in the Philippines are an indispensable component of lawful and enforceable property transactions. While the fees themselves are modest relative to the value of the property or loan, their proper payment and compliance ensure legal validity, public recognition, and protection of rights. Both borrowers and lenders are well-advised to treat notarization with due care, ensuring that documents are executed under the authority of a duly commissioned notary and that all associated legal and administrative steps are properly followed.