Good News for Home Buyers: State Bank of Pakistan Increases Housing Loan Duration to 30 Years
The State Bank of Pakistan has updated its housing finance rules, raising the maximum repayment tenure to 30 years for home, plot, or renovation loans, and 10 years for solar installations. The new regulations limit monthly debt payments to 65% of net income and require compulsory property insurance.
BUSINESS NEWS
Aagahi Hub
8/20/20262 min read
Getting a loan to build or buy your dream home in Pakistan just got easier! The State Bank of Pakistan (SBP) has introduced a new, friendly set of rules for housing finance. These updated regulations replace older rules from 2019 to 2021 and apply immediately to all commercial banks and financial institutions across the country.
Here is a simple breakdown of what these new housing loan rules mean for you and your family.
What Can You Use the Housing Loan For?
Under the newly updated rules, citizens can apply for a home loan for several different uses:
Buying a ready-made house, flat, or residential plot.
Building a house on a plot you already own.
Renovating, repairing, or expanding your current home.
Installing clean energy systems, like solar panels, on your property.
Key Highlights: Longer Time to Pay Back
The updated State Bank policy brings important changes to loan repayments, property checks, and safety rules:
30-Year Loan Repayment: The maximum time to pay back a regular house loan has been extended to 30 years, making monthly installments smaller and more affordable.
10-Year Solar Loan Limit: If you take a loan specifically to install solar panels or renewable energy, you get up to 10 years to clear the payments.
Easy Income Rules (65% Cap): Your total monthly loan payments (including your home loan and any existing personal or car loans) cannot be more than 65% of your total monthly take-home income.
Credit History Check: Before approving any home loan, banks must check your official credit history report through the central bank’s Electronic Credit Information Bureau (e-CIB) or licensed credit rating agencies.
Property Valuation and Safety Coverage
To protect both the buyer and the bank, property checks and safety rules have been simplified:
Valuation for Loans Over Rs. 10 Million: If your loan amount is more than Rs. 10 million, the property must be checked and valued by an approved expert from the Pakistan Banks’ Association (PBA). For loans up to Rs. 10 million, the bank can perform an internal valuation directly.
Easier Mortgages for Small Loans: Properties bought using home loans will be mortgaged with the bank. However, for smaller loans up to Rs. 5 million, banks can accept a simple lien on the property if you provide a Green Property Certificate.
Compulsory Property Insurance (Takaful): It is now mandatory for the home to have full insurance coverage equal to the total remaining loan balance. Banks must clearly inform buyers about all costs, premiums, and extra fees upfront.
For more easy-to-understand updates on government policies, banking news, and financial relief schemes in Pakistan, keep following Aagahi Hub.