Overview. When a borrower defaults on a housing loan in the Philippines, the lender may foreclose the mortgage on the home. Philippine law recognizes two distinct concepts that are often conflated:

Equity of redemption — the right to pay the judgment or mortgage debt before the foreclosure sale is confirmed (judicial foreclosure) or before the extrajudicial sale actually happens.
Right of (statutory) redemption — the right to re-acquire the property after the auction sale by paying the required redemption price within a fixed period.

Understanding which right applies—and when—depends on (1) how the foreclosure is conducted (judicial vs. extrajudicial), and (2) who the mortgagee is (a bank/quasi-bank vs. a private lender), plus a few special regimes (e.g., Pag-IBIG).

1) Sources of Law (at a glance)

Act No. 3135 (as amended): governs extrajudicial foreclosure of real estate mortgages (the most common route for housing loans).
Rules of Court, Rule 68: governs judicial foreclosure of mortgages.
General Banking Law (RA 8791), Sec. 47 (as amended by RA 10552): tailors redemption/equity rules when the mortgagee is a bank, quasi-bank, or trust entity.
Rule 39, Sec. 28 (execution sales) is often used by the courts by analogy to compute redemption amounts and interests for realty sales when a specific mortgage statute is silent.
Local Government Code tax delinquency sales have their own redemption rules; those apply when property is sold for unpaid real property taxes, not housing-loan default.

2) Judicial vs. Extrajudicial Foreclosure: Which rights exist?

A. Extrajudicial foreclosure (Act 3135)

Process. Auction conducted by the sheriff/notary based on a “power of sale” clause in the mortgage.
Right of redemption. The mortgagor (and certain successors/creditors) generally have one (1) year from the date the certificate of sale is registered with the Registry of Deeds to redeem.
Possession during the redemption period. The mortgagor typically keeps possession. A buyer at auction can get a writ of possession even within the one-year period only upon posting a bond (ministerial after proper sale), and without a bond once the redemption period expires.
After the period. If not redeemed within one year, the purchaser may consolidate title; the Registry issues a new title to the purchaser.

Who may redeem? The mortgagor, his/her successors-in-interest (heirs, vendees, assignees), and junior encumbrancers/creditors. A co-owner generally must redeem the entire property; partial redemption is not favored unless the sale covered only a divisible interest.

B. Judicial foreclosure (Rule 68)

Process. Filed in court; the judgment fixes a period (often 90–120 days) for the debtor to pay.
Equity of redemption only. The mortgagor can pay any time up to the confirmation of the sale by the court. After confirmation, there is no statutory redemption, particularly where the mortgagee is a bank/quasi-bank (this is reinforced by RA 10552).
Deficiency. Courts may render deficiency judgments if the sale proceeds don’t fully satisfy the debt.

3) Computing the Redemption Price (extrajudicial foreclosure)

Unless the governing mortgage statute or the certificate of sale states a different lawful basis, courts commonly apply Rule 39-style mechanics by analogy:

Bid/Purchase Price at auction; plus
Interest at 1% per month (or fraction) from the date of sale until redemption; plus
Taxes, assessments, and prior liens paid by the purchaser after the sale, with the same 1% monthly interest; minus
Rents and profits the purchaser actually received (if any must legally be imputed).

Example. Home sold at auction for ₱3,000,000 on March 1. Owner redeems on November 1 (8 months later). Redemption = ₱3,000,000 × (1 + 0.01 × 8) = ₱3,240,000. If purchaser paid ₱50,000 of real-property tax in June, add ₱50,000 × (1 + 0.01 × 5) = ₱52,500. Total: ₱3,292,500 (illustrative). Always verify exact numbers from the certificate of sale and applicable sheriff/notary computations.

Where to pay. Typically to the purchaser at auction (or the sheriff/notary per local practice), with official receipts and a redemption certificate issued. Always record the redemption with the Registry of Deeds to cancel the certificate of sale and restore/retain the owner’s title.

4) Timelines & Practical Flow

Default → Demand → Foreclosure Chosen

Pre-foreclosure options. Reinstatement, restructuring, repayment plans, or dación en pago (conveying the property to settle the debt). Many lenders—especially Pag-IBIG—offer restructuring or buy-back programs before auction or shortly after (policies vary).
Auction sale. Highest bidder wins; Certificate of Sale is issued.
Registration triggers the one-year clock (extrajudicial). Mark the exact registry date.
During the one-year period:
- Debtor can live in the property (subject to bond-backed writs of possession sought by the buyer).
- Debtor may sell the property to a third party to raise cash for redemption; the buyer can redeem in the debtor’s name (via assignment).
Redemption payment & recording. Get official receipts and Certificate of Redemption; record it to cancel the sale.
If no redemption: The buyer consolidates title and may obtain writ of possession as a matter of course; the prior owner must vacate.

5) Special Situations

A. If the lender is a bank/quasi-bank

Extrajudicial foreclosure: One-year statutory redemption (Act 3135 + RA 8791).
Judicial foreclosure: No statutory right of redemption after confirmation; only equity of redemption before confirmation (RA 10552).

B. Pag-IBIG Fund (HDMF) housing loans

Pag-IBIG commonly offers restructuring and loan remedies (e.g., reinstatement or buy-back) before and sometimes after auction, separate from statutory redemption rights. The precise windows, documentation, and fees are programmatic and may change (e.g., special condonation/restructuring programs). Always check the current Pag-IBIG circulars and the Notice of Default for exact timelines.

C. In-house developer financing

Many contracts include extrajudicial mortgage provisions enabling Act 3135 foreclosure. Buyers who default on installment sales may also invoke protections under the Realty Installment Buyer Act (RA 6552, “Maceda Law”), but Maceda rights (cash surrender, grace periods) are distinct from redemption after a mortgage foreclosure. Determine whether your arrangement is (1) a pure installment sale without a real estate mortgage vs. (2) an installment sale with a mortgage in favor of the developer or a bank.

D. Tax delinquency sales (LGU)

If the property was sold due to real property tax delinquency (not loan default), the Local Government Code provides a separate redemption period (generally one year from the date of sale), different notices, and different computations.

E. Multiple or junior liens

A junior mortgagee or judgment creditor may redeem within the period. If a junior lienor redeems, the original debtor can no longer redeem through that junior creditor; priorities matter.

F. Partial interests, co-ownership, and family homes

Family home status is a shield against certain claims but is not a shield against a mortgage voluntarily constituted on it.
Redemption by a co-owner typically must cover the entire property sold.

6) Deficiency or Surplus After Sale

Deficiency judgment. If auction proceeds are less than the total debt (principal + interest + penalties + costs), the lender may sue for the deficiency (subject to contract and special statutes).
Surplus. If there is an excess, the mortgagor is entitled to the surplus after paying expenses and junior liens in order of priority.

7) Documentation You’ll Need to Redeem

Valid ID and proof of authority (if redeeming as heir/assignee/agent: SPA, deed of assignment, extrajudicial settlement, etc.).
Certified copy of the Certificate of Sale and registry details (to confirm the one-year deadline).
Official computation from the sheriff/notary or purchaser (showing purchase price, interest accrual, taxes paid, and other allowable charges).
Cashier’s/manager’s check(s) per the payee instructions.
Acknowledgment of payment and Certificate of Redemption for registration.

8) Common Pitfalls

Missing the registry date. The one-year period is counted from registration of the sale, not from the auction day.
Underpaying. If you omit accrued 1% per month interest or taxes paid by the purchaser, the tender may be insufficient.
Not recording the redemption. Without recording, the Registry may still consolidate the buyer’s title.
Assuming possession guarantees ownership. Staying in the home during the redemption period does not stop consolidation after the period lapses.
Confusing Maceda Law with mortgage foreclosure. They are different regimes with different remedies and clocks.

9) Strategic Tips for Homeowners

Act fast. Ask for the official computation immediately after learning the sale was registered. Time is your enemy.
Explore parallel remedies. Seek restructuring/reinstatement with the lender (or Pag-IBIG if applicable) while preparing for redemption—one does not necessarily preclude the other until a deal is signed.
Consider a private sale. Selling the property during the period (then using proceeds to redeem) can be more economical than losing it at the bid price plus interest.
Document everything. Keep receipts, dated tenders, and correspondence; courts honor good-faith, timely tenders.

10) Quick Reference — What applies to your case?

Situation	Right After Auction?	Deadline Trigger	Deadline Length
Extrajudicial foreclosure (any mortgagee)	Statutory redemption	Registration of certificate of sale	1 year
Judicial foreclosure vs. bank/quasi-bank	No statutory redemption after confirmation; only equity of redemption before confirmation	Confirmation of sale ends equity	Court-fixed (often 90–120 days to pay before sale; equity ends upon confirmation)
Tax delinquency sale	Statutory redemption (separate regime)	Date of sale	1 year (LGU regime)

11) FAQs

Q: Can I redeem just a portion of the property? A: Generally, no. Redemption is of the whole property covered by the certificate of sale (unless only a divisible interest was sold).

Q: Can my buyer redeem for me? A: Yes, via assignment of redemption rights or a deed showing succession-in-interest; the Registry will look for proper documentation.

Q: What if the buyer already took possession? A: You may still redeem within the period; the buyer must reconvey upon valid redemption.

Q: Does filing a case extend the one-year period? A: As a rule, no. Courts strictly construe the deadline unless a recognized legal ground tolls it (rare).

12) Action Checklist

Get a certified copy of the certificate of sale and confirm the registry date.
Request a formal payoff/redemption computation (principal bid + 1%/month + taxes/assessments with interest).
Line up funding (loan, sale, relatives, refinancing, Pag-IBIG or lender workout).
Tender payment properly, obtain receipts and a Certificate of Redemption.
Register the redemption to clear/cancel the certificate of sale and protect title.

This article provides general information on Philippine foreclosure redemption rules. For a specific case, consult a Philippine lawyer and verify current lender/Pag-IBIG program circulars and local Registry practices.