How and Where to Apply for Home Loans in Pakistan

Pakistan faces a housing shortage, and such a massive shortfall and inadequate housing facilities have made it a bigger issue. The rising inflation has made it hard for the ordinary person in Pakistan to build a new house. Luckily, home loans in Pakistan are making life easier and fulfilling the dream of millions of people to become owners of their houses.

Getting a home loan in Pakistan is never considered an easy task. With lots of ifs and buts and issues of ‘Riba’ has made it hard for people in Pakistan to get a home loan. Moreover, only a few banks in Pakistan offered a loan for the construction of the house, and it was never easy to get approval.

With increasing housing societies, affordable plots for sale and new government policies, people are now going for home loans more than before. Naya Pakistan Housing Scheme is an excellent effort of the incumbent government, providing 5 Million affordable houses under Naya Pakistan Housing Scheme and incentivizing banks throughout the country to provide easy home loans.

Prime Minister Imran Khan Loan Scheme in Pakistan has removed many obstacles between easy home financing and humble class residents.

Types of Home Financing in Pakistan:

There are two common types of home financing in Pakistan
 

• Home Mortgage
• Home Loans

Difference between Home loans and mortgages:

For common people, home loans and mortgages look the same, but they are different. i.e.,
 

• Home loans provide you with financial assistance to buy a house construct and upgrade the existing housing. In home loans, the property is not under the ownership of the applicant.
• The mortgage loan applicant, on the other hand, loan applicant possesses the property owner for which the loan is required. One of the famous home mortgage providers is “House Building Finance Company (HBFC).”

HBFC was established in 1952, and since then, it has been the only known housing mortgage institution in Pakistan set up by the Pakistan government. The services are focused on providing finance for the residential needs of the middle and lower class. It has around 51 branches throughout Pakistan to serve residents in fulfilling their housing needs.

How to apply for a home loan?

A home loan can be acquired from banks for construction, purchase or renovations. It is crucial to understand the eligibility criteria, requirements and process of repayment, etc. Every bank has a different set of standards. The general eligibility criteria and conditions are:
 

• You can get a home loan only when employed or running a business.
• Banks have set the condition to ensure a minimum bad debts ratio to verify whether the applicant can pay the debt or not in the long run.
• Meeting any two conditions, your application will move to the next stage of getting a home loan.
• In the second phase, the applicant will be required to submit the required documents like:
• Salary Slips or Employment Letter
• Bank Statement of financial position in case the applicant is running a business.
• The loan amount is different from Bank to Bank; it usually ranges between 5 Lac to 50 Lacs. The returnable amount increases from 5 to10 % due to the interest rate.

Where to get House loans in Pakistan?

Name and brief details of banks providing house loans in Pakistan are:

Meezan Bank – Interest-Free Loan:

Meezan Bank is the First Islamic Bank providing interest-free home loans in Pakistan. The Bank commenced its operations in 2002, and in a couple of decades, it has more than 850 branches throughout the country.

Easy Home is a completely interest-free solution for home financing needs. Key Features of the house loan are:
 

• Highest Financing Amounts
• Maximum Finance against Property Value
• Flexibility to make partial payments
• Affordable Installments and consistent, reducing rent every month
• Shariah Compliant Life Takaful Facility

Bank Details:

Meezan Bank Limited, Meezan House, C-25 Estate Avenue, SITE, Karachi.
 Email: info@meezanbank.com
 Phone: +92 (21) 38103500 & +92 (21) 37133500
 Fax: +92 (21) 36406049

Bank Al-Habib:

Bank Al-Habib is one of the largest banks of Pakistan, facilitating residents with easy home loans. It has more than 950branches in Pakistan. Bank Al Habib supports incumbent government and State Bank efforts for subsidized houses under Mera Pakistan Mera Ghar.” Features of the house loan are:
 

• Free Life Insurance
• No mark-up or restrictions on early payment
• Free Life insurance
• The loan can be paid in monthly installments in 20 years.
• Subsidized Markup

Bank Details:

3rd Floor, MacKinnon’s Building, l.l Chundrigar Road, Karachi.
Email: info@bankalhabib.com 
Tel: (021) 32412421
Fax: (021) 32463142

Muslim Commercial Bank:

MCB is the oldest Bank on our list that provides home loans in Pakistan. The Bank was established in 1947 and had around 1550 + branches all over the country. The features of the loan are:
 

• Available at competitive prices
• House loans are available for 2 to 25 years installment tenure
• Subsidized Markup under Mera Pakistan Mera Ghar scheme
• Loans available for renovation of the house

Bank Details:

MCB House, 1st Floor 15 Main Jalil Road, Gulberg Lahore, Pakistan
Tel: 111-000-622

Askari Bank:

Askari Bank has been excellently operating in Pakistan since 1991. It is one of the leading banks in the country. Askari Bank offers subsidized home loans under the government financial scheme. The features of the loan are:
 

• There are three tiers; 
• Tier 1 is worth 2.7 million, 
• 2nd Tier worth 6 million, 
• and 3rd Tier 3 worth 10 million  
• The tenure of a house loan is between 5 to 20 years. 

Bank Details:

Askari Bank, Third Floor, Plot No. 18, NPT Building, F-8 Markaz, Islamabad.
Tel: 051-8092000, 051-2857424-39 or call at UAN Number 111-000-787
Fax: 051-2857448

The Bank of Punjab: 

Bank of Punjab (BOP) is one of the leading Banks in Pakistan. The Bank holds AA ratings from PACRA. The Bank provides easy home loans under the government’s markup subsidy scheme “Mera Pakistan Mera Ghar” house loans. 
 

• Subsidized loans
• Loan tenure from 5 to 20 years
• Loan available under Tier categories.

Bank Details:

BOP Tower, 10-B, Block E-II, Main Boulevard Gulberg III Lahore
UAN: 111-200-100
Tel: (042) 35783700-10
Fax: (042) 35783713-35783975

That’s a wrap! We hope that this guide will help you construct your house of dream with ease. Feel free to share your feedback and queries at info@reall.pk. Stay tuned to Reall.Pk blog page for latest news and information.