The concept of house financing isn’t that popular in Pakistan. People are scared of getting a home finance loan as they think financing will bring trouble for them. The main reason behind it is the high-interest rates of mortgage that are roadblocks to this financing decision. Now it seems like things are going to change for everyone. The government has granted a Rs. 33 Billion markup subsidy for house financing.
Table of Contents
It means that now you won’t get a home loan at a very high rate because the Government is covering the cost of your borrowing through subsidy. In Pakistan, the middle class and low-income group always want to have their own home. However, they can’t fulfill this dream because they have to meet other essential living expenses. But now the Government is standing by the side of the general public.
If you want to buy a new home or plan to construct your home, you should opt for home financing. This is the right time to apply for a home loan because the Government has joined hands with the State Bank of Pakistan, and the primary mission of this team is to make home financing or mortgage quite affordable for everyone. This new facility will allow every borrower to get a loan amount for his home purchase or construction at a reasonable and subsidized markup.
This facility is available to general masses in Pakistan with the administrative support of the State Bank of Pakistan and the Naya Pakistan Housing and Development Authority (NAPHDA).
The Pakistani Government allocated this subsidy for the upcoming ten years of home financing. They have a plan to show continual commitment and support to house financing in the upcoming year. You can avail markup subsidy from almost any bank that offers house financing or mortgage facility.
This financing is divided into three tiers by SBP. Let’s get details of each.
If you want to purchase a new home/flat or apartment and interested in the Naya Pakistan House and Development Authority project, then you can avail of finance from Tier one. This home loan lets you purchase or construct an area of 5 marla or 125 square yards. The maximum financing limit is 2.7 PKR, while you can set a loan term of a maximum of 20 years with your bank. As far as the rate is concerned, then the bank takes into account the Karachi interbank rate plus 250 basis points. But things are pretty good now because you can avail of a rate of 5 percent for the first five years and 7 percent for the next five years, which will make your borrowing decision a good one. You will deal with a cost-effective mortgage.
This finance facility is suitable for those who haven’t applied for NAPHDA projects or are not qualified. This loan option also allows you to borrow money to purchase a home/apartment or flat of 125 square yards where the maximum covered area is 850 square feet. You can get a loan of a maximum of PKR 3 million for up to a maximum of 20 years. The subsidized markup rate of Tier I and II is the same. Though the bank with charge a maximum markup rate of Kibor plus 400 basis points.
If you belong to a middle-income family, the Government has certainly picked the best financing plan for you. I like the most because the Government is taking care of middle-class people and offering them a chance to meet their plans of purchasing or constructing a big home. The above two financing plans are designed for the 5-marla housing project. Do you want a bigger house? It would be best if you went with Tier III financing. It lets you borrow up to PKR six million to buy or purchase a home/flat or apartment of more than 125 square yards and up to 250 square yards, in which maximum cover area could be from 850 square feet to 1,100 square feet. You can get this loan for up to 20 years. Bank will charge a markup rate of Kibor plus 400 basis points. The best thing is you will get a markup subsidy, where you need to pay 7 percent in the first five years and 9 percent in the next five years.
In case you are planning to finance your home purchase or construction, it’s the right time to apply in your nearest bank as the Government is offering financing relief to the masses with its PKR 33 Billion Markup Subsidy. Go and avail the benefit of low rate mortgage in Pakistan.