Housing Loan in Pakistan - Cheaper & Easier

SBP starts facilitating. Scope is widening.

Housing gets affordable - policy fine-tuned for better

This government has been promoting housing sector as the previous one promoted infrastructure spending. Affordable housing is everyone’s need/want/desire. Ever since promotion of Naya Pakistan Housing scheme, criticism was rife over ineligibility of many borrowers & stringent requirement. Sometimes, new houses were not available. If they were, they were off the price limits. Banks wanted several surety requirements that were not available otherwise to undocumented labour class.

In short, policy has come a long way & is now fine tuned to cater to much bigger audience. With no price limits, lower interest rates, SBP’s targets for banks, construction amnesty, housing backlog, easier builder documentation, enhanced scope of area 2000 sqft & no limit on age of the unit, coast is clear.

Let’s look at the numbers (available on https://www.sbp.org.pk/smefd/circulars/2021/C3.htm);


T0:
- Microfinance (K+7%) under non-NAPHDA projects
- House upto 125 sqyds & Flat with max cover area of 1,250 sqft
- Max Loan: Rs 2 mn
- Max Unit Price: None
- Interest: 5% for first 5 yrs & 7% for next 5 yrs

T1:
- Banks under NAPHDA projects (K+2.5%)
- House upto 125 sqyds & Flat with max cover area of 850 sqft
- Max Loan: Rs 2.7 mn
- Max Unit Price: Rs 3.5 mn
- Interest: 3% for first 5 yrs & 5% for next 5 yrs

T2:
- Banks under non-NAPHDA projects (K+4%)
- House upto 125 sqyds & Flat with max cover area of 1,250 sqft
- Max Loan: Rs 6 mn
- Max Unit Price: None
- Interest: 5% for first 5 yrs & 7% for next 5 yrs

T3:
- Banks under non-NAPHDA projects (K+4%)
- House upto 250 sqyds & Flat with max cover area of 2,000 sqft
- Max Loan: Rs 10 mn
- Max Unit Price: None
- Interest: 7% for first 5 yrs & 9% for next 5 yrs

Eligibility:
- First Time Owner
- 1 individual can avail this once

Age of Unit:
- Newly constructed during last one year from the date of application. (Not be applicable till March 31, 2023 under Tier 0, Tier 2 & Tier 3)

Housing sector has actually gotten a booster. Many people - from middle class - now would (or should) jump towards the opportunity of cheaper finance, higher size & higher financing limits. It actually hasn’t been this good. If you’re smart (or have good financial advisors) you may consult tax lawyer for tax savings on mortgage financing.

Previously, many people envied bank employees (including this auther) for cheaper housing loans. Now, it’s within reach. Don’t wait for the prices to balloon. Do the maths & go for it.

https://www.thenews.com.pk/print/809889-low-cost-housing-markup-subsidy-increased-to-rs36bln