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Home Financing in Pakistan

  • Published On 15-Nov-2022
Home Financing in Pakistan

                                                                      Home Financing in Pakistan

Home financing is one of the most reliable and feasible forms of loan that you can avail of for the purchase of a home or any other form of residential property. You can avail of home financing services from any bank, mortgage institute, or any other financial institute.

Home Financing in Pakistan:

State Bank of Pakistan in collaboration with the previous government has introduced several policies for availing home finance. Thanks to the formulation of these policies, the criterion for availing the home loan has been loosened.

There are 5 tiers that conclude these policies and each one has its own limits and interest rates.

  1. Tier 0 is meant for microfinance banks and you can avail of a maximum loan of 2 million. In this tier, the interest rate for the first 5 years is 5% which goes up to 7% in the next year. This category is specified for microfinance banks only.
  2. Tier 1 comes with the cheapest markup of 3% for the first 5 years period and 7% for the next 5 years. The loan limit for this category is 2.7 million and is characterized by a cap on the housing unit’s price at 3.5 million. This category is specified for the government’s NAPHDA projects only.
  3. Tier 2 and 3 come with a maximum loan amount of Rs. 6m and 10 million PKR, and no cap. The interest rates for these categories are 5% and 7%, and 7% and 9% respectively. These categories have certain specifications regarding the property area that you have to keep in mind while financing your home. However, till March 2023 these tiers offer you the relaxation that you can avail of the home loan even for an old house and it is not necessary for the house to be newly constructed. You can avail of loans from these categories for old houses too.
  4. Tier 4 offers you the maximum leniency in terms of property size.

State Bank of Pakistan in collaboration with the NAPHDA initiative of the government has formulated certain policies under which almost all the banks in Pakistan offer home financing services to provide adequate housing facilities to the public. So, if you are looking for an opportunity to build your own home, you can avail of these services.