Pakistan faces a severe housing shortfall. According to the State Bank of Pakistan, there is an estimated deficit of around 10 million housing units, which increases by 700,000 every year. Together with such a huge shortfall, the existing unsatisfactory housing facilities make it impossible for the government to elevate peoples’ life standards. Therefore, they have to consider other options.
Housing finance in Pakistan is one of the readily available opportunities that provide means for owning a personal home; however, limited knowledge and unstable interest rates have kept us away from such an opportunity.
In this article, we will briefly discuss the home loan opportunities offered by leading commercial banks and public companies of Pakistan, and how to utilise them. The information contained in this article has been obtained from various sources of the respective banks and companies – including their official websites and customer branches, and from the State Bank of Pakistan manuals.
1. Habib Bank (Pvt.) Limited
Salient Features of the Home Loan
- Financing limit between PKR 2,000,000 to PKR 40,000,000
- Both fixed and variable mark-up rates
- Repayment tenure ranging from 5 years to 20 years
- Free property insurance at all times
Financing Options
Buy: loan for buying a new home.
Build: loan for construction on land you already own.
Renovate: loan for home renovation.
Criteria
Salaried individuals
- Nationality
- Both resident Pakistanis and Overseas Pakistanis*
- Age limit
- 25 years or more at the time of loan application, and 60 years or less at the time of loan maturity
- Existing HBL account holders
- minimum monthly income to be PKR 100,000
- New to bank customers
- minimum monthly income to be PKR 150,000
- Work experience
- Permanent employee with a minimum of 5 years’ experience
*(Overseas Pakistanis must have a resident Pakistani as a co-borrower)
Self-employed business persons/professionals
- Nationality
- must be a Pakistani resident
- Age limit
- 30 years or more at the time of loan application and 65 years or less at the time of loan maturity
- Existing HBL customers
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- minimum monthly income to be PKR 150,000
- New to bank customers
- minimum monthly income to be PKR 200,000
- Work Experience
- Minimum 5 years’ experience in personal business
Documents required
Salaried individuals
- Original copy of CNIC along with verified copy
- Two recent passport size photographs
- Letter from employer
- Salary slip or attested salary certificate for last 3 months
- Bank statement for last 12 months
- Copy of property documents
Self-employed business persons/professionals
- Original copy of CNIC along with verified copy
- Two recent passport size photographs
- Proof of occupation/business
- Bank statement for last 12 months
- NTN/Tax returns
- Copy of property documents
2. Muslim Commercial Bank (MCB)
Salient Features of the Home Loan
- Financing limit between PKR 15 Million to 50 Million
- Repayment in equal monthly instalments
- Total monthly instalment not to exceed 50% of the applicant’s net disposable income
- Maximum loan tenure is 20 years
Financing Options
Buy: loan for buying a new home.
Build: loan for construction on land you already own.
Renovate: loan for home renovation.
Eligibility Criteria
- Must be a Pakistani resident national
- Both salaried and self-employed businessmen/professionals
- Satisfactory verification
- Satisfactory bureau checks
- Satisfactory income estimation, property valuation and legal opinion
Loan Amount
- Home Purchase: PKR 50 Million
- Home Construction: PKR 25 Million
- Home Renovation: Up to PKR 15 Million
Documents Required
- Application form
- Copy of valid and original CNIC/SNIC
- Two passport size photographs
- Declaration of all financing facilities availed from all banks/DFIs
- Income documents
- Business /employment proof
- Copy of property documents
- Any other document required by the Bank
3. Bank Al Habib
Salient Features of the Home Loan
- Financing limit between PKR 0.3 Million to PKR 50 Million
- Repayment in equal monthly instalments
- Repayment tenure ranges from 1-25 years. However, an undertaking is to be provided by the applicant to complete the construction in 2 years.
- Loan disbursement stages for home construction will be as follows:
- Foundation – 30%
- Structure – 30%
- Finishing – 40%
Financing options
Buy: loan for buying a new home
Build: loan for construction on land you already own, and for under construction home
Loan Amount
PKR 0.3 Million to 50 Million (for home buying)
PKR 0.3 Million to 35 Million (for home constructing)
Eligibility Criteria
- Nationality
- Must be a Pakistani national
- Existing BAHL individual customers with valid CNIC issued by NADRA, or NICOP holders with business or employment in Pakistan
- Experience
- Self Employed professionals with at least 3 years of valid business proof with minimum Rs100,000/- net monthly income.
- Salaried individual with at least 2 years of permanent service and net monthly take home salary of Rs60,000/-.
- Age
- Between 25 to 60 years for salaried individual & maximum 65 years for Business/Self Employed Professionals at the time of loan maturity.
- Only spouse can be made as co-borrower after obtaining her/his consent.
- Minimum income requirement for co-borrower will be Rs30,000/-.
Documents Required
Self-employed professionals/businesses
- Financing Application Form
- Three recent passport size photographs of primary & co-applicant (if any).
- Valid CNIC of primary/co-applicant
- Proof of being in business for 3 years can be established through any of the following documents.
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- Bank certificate reflecting business entity status, customer’s status & years in business.
- Last 3 years’ tax documents.
- Partnership deed (registered & notarized).
- Memorandum & Articles of Association along with latest Form `29’ or Form `A’.
- Copy of ownership title documents of the office.
- Company remuneration certificate (in case of salaried director).
- Verifiable rent deed or ownership deed (original seen).
- Copy of professional degree / certificate.
- Membership certificate from relevant professional body (for SEP only).
- Certificate of incorporation in case of private limited company.
- For private limited, applicant is to provide one year bank statement of his personal account.
Salaried persons
- Financing Application Form
- 3 recent passport size photographs of primary & co-applicant
- Valid CNIC of primary/co-applicant
- Latest 3 months’ salary slips
- Latest salary/employment certificate
- Last one year bank statement; where salary is being credited
4. JS Bank
Financing options
Buy: loan for buying a new home.
Build: loan for construction on land you already own, and for under construction home.
Loan amount
Buy: PKR 500,000 to PKR 100 million
Build: PKR 500,000 to PKR 100 million
Eligibility
- Computerised National Identity Card /NICOP
- Must be a resident of Pakistan/Non Resident Pakistani
- Income documents (salary slip/account statement)
Required Documents
- CF-1 Undertaking
- Applicant’s copy of CNIC / NICOP / POC
- Copy of Co-applicant’s CNIC
- 2 recent passport-sized photographs of each applicant
- Last 3 Months Salary Slips (Original and Attested by the Employer)
- 6 Months Bank Statement (Original and duly attested by the bank with stamp)
- Employment Certificate
- Copy of Passport.
- Copy of Visa / Work permit / Residence permit
- Copies / details of any financing facility being availed in the country of employment or in Pakistan
- Copy of last paid Utility Bills (Electricity / Gas / Telephone) of Co-applicant residing in Pakistan.
- Previous Employment Proof (if applicable)
- Complete corresponding details of HR Department (email address required) for documents verification. Complete corresponding details of concern bank (email address required) for bank statement verification.
- Applicant will be required to open a joint account with co-applicant in with JS Bank.
5. Meezan Bank
Salient Features of the Home Loan
- Financing tenure is up to 25 years
- Financing limit is from 500,000 to 5 Million
- Shariah compliant payment models
Eligibility
- Age
- 25 years and maximum 65 at financing maturity (primary applicant)
- 21 years and maximum 70 years at financing maturity (co-applicant) Primary (or Single) & Co-applicant allowed.
- Monthly income of Salaried
- Gross income of PKR 40,000 per month
- co-applicant income may be clubbed into the income (in case of spouse only)
- Monthly income of Self-Employed / Business Person
- Gross income of PKR 75,000 per month
- Experience
- Salaried – permanent job with a min. 2 years’ work experience in the same industry
- Self-employed / business person – min. 3 years in current business / industry
- Financing tenure
- 3 years to 20 years
- Maximum 25 years tenure for Salaried & SEP customer
Financing options
Buy: loan for buying a new home.
Build: loan for construction on land you already own, and for under construction home.
Loan amount
- PKR 500,000 to PKR 50 million for Salaried, SEP, NRP & Businessmen customers
Re-payment Plans
Meezan Bank offers two payment plans – UMI Model and Step-up Model. Both the models are Shariah-compliant structures that provide ease of repaying the debt.
Required Documents
General
- Copy of Applicant’s CNIC
- Copy of Co-applicants CNIC (if applicable)
- 2 latest passport-sized coloured Photographs of Applicant / Co-applicant
- Copy of last paid Utility Bills (Electricity/Gas/Telephone)
- Copy of CNICs of legal heirs
- Copy of recent Credit Card Bills and any other credit facilities (if applicable)
- Copy of professional Degree/Certificate (if applicable)
- Copy of Rent Agreement (if applicable)
- Life Takaful documents (Declaration of Good Health / Health Questionnaire)
Salaried Individuals
- Employment Certificate including salary, date of joining & present designation
- Original or Certified salary slip of last three months
- Previous employment proof (if applicable)
- Salary A/c Bank statement of salary account for the last 12 months
Businessman and / Self Employed / Professionals
- 3 years proof of business (e.g. Tax Return/Bank Certificate)
- Copy of NTN Certificate & last three years’ tax returns
- Copy of Partnership deed (In-case of Partnership)
- Professional Association Membership Certificate/Practice License (if applicable)
6. House Building Finance Company
Financing Options
- Buy Home
- Build Home
Salient Features of Home Loan
- Financing limit is PKR 25,000,000
- Financing Tenure is 3-20 years
- Fixed mark-up rate of 12%
- Life and property insurance covered
- Co applicant is allowed but should be an immediate family member
- up to 80% of the property’s value will be financed
Eligibility
- Nationality
- both resident and overseas Pakistanis can apply
- Age
- salaried – 18 to 57 years
- self-employed/businessmen – 18 to 62 years
- income criteria
- Up to PKR 100,000/-
- collaterals
- house – max plot size up to 300 square yards
- flat – max covered area up to 1400 square feet
This article attempts to provide the basic information about getting home loans from various commercial banks in Pakistan. The purpose of this blog post was to generate awareness about multiple options through which Pakistanis could own their personal homes or could renovate the ones they have.
It is, however, to be kept in mind that almost every commercial bank offers a home loan, and owing to space limitation, we could not account for all of them. In the next piece, we will be sharing some other options from public and private sectors.
