Here we discuss the complete guide for house finance in Pakistan. House financing is the rate at which a bank or other financial institution charges for a loan to a house buyer. This is usually expressed as a percentage of the loan amount. The average house finance rate in Pakistan is 3% for the first five year and 5% for more than five year to 20 year.

House finance rates in Pakistan can vary significantly depending on factors such as:
House loans are typically offered through banks, building societies and other lending institutions. These types of loans are sometimes called “house financing”, “house purchase” or “house purchase mortgages”. House loans are usually offered by third-party lenders (e.g., banks) with whom borrowers have no direct relationship, so they do not have access to the borrower’s personal financial information (such as credit history).

If You Were Interested in Real Estate Investing, Then You Must Know About House Finance in Pakistan

If you are interested in real estate investing, then you must be aware of some important things. The first thing is that there are many different types of real estate investment. You can invest in residential or commercial property.

The second thing is that there are different ways to invest in real estate. For example, if you want to buy a house for rent, then you can do it through a lease instead of buying the property outright. If you want to buy a house for sale, then it’s better to go for an auction than a purchase contract and wait for the seller’s offer. When it comes to buying and selling properties or house finance in Pakistan, there are many factors that need to be considered before making your decision: location, price range, time period and other factors like the condition of the property etc.

Home Financing Process: What Kind of Documents Do You Need to Take Before House Finance in Pakistan?

Some documents are necessary to apply for a house finance in Pakistan. In this section the procedure is described. The individual can take help from the Bank, the bank will provide them a specimen which will contain an explanation of how to apply and some steps you should take if you want to get your home loan done. In the first section, we will describe the process of applying for a mortgage, while in the next section we will explain how it works and afterwards, we will discuss what documents you need and which ones are required by lenders and what documents are not required at all.

  • Loan application form.
  • 3 photographs passport sized.
  • Identify proof.
  • Residence proof.
  • Bank Account Statement/Passbook for last 6 months.
  • Signature verification by bankers of the applicant.
  • Liabilities statement and Personal Assets.
  • Property detailed documents.

What Should I Consider When Making Home Financing Decisions?

We all want to buy a house, but there are many different factors that we need to take into consideration before making a decision. The first step is to determine whether you are a good candidate for a home purchase. This entails analyzing your strengths and weaknesses, clarifying your interests, and finding solutions that will not leave you disappointed. Don’t rush into buying a house because people usually make decisions too quickly without taking time to analyze the situation carefully.

Always Plan Ahead

The main step you should consider while making a decision for home financing is: always make a foolproof plan, and don’t rely on a single strategy. Make sure to plan B for survival during failure. Without proper planning and investigation of financing policy there are more chances of your failure or getting costly policy. Specialists follow the same strategy before getting a home loan for investing in real estate.

Not Hiring a Real Estate Agent

Many people abide by hiring an agent for property management and they have to pay more for that mistake. No doubt, an agent has fees for the services which he is providing but he has a best option and proper guide for you.

Research Properly

Research is a base of every strategy. Without exploring properly you can think about the perfect option and secure opportunity. Specialists suggest understanding the contrasts between government and private loan. It likewise assists with staying away from expected misfortune.

Home Insurance

You likewise should be intellectually ready to employ a home monitor at the hour of purchasing a house. This might seem like such a large number of costs however purchasing a property without insurance has a risk. If the property gets damaged before paying full mortgage, you need to pay for it otherwise the insurance company itself will deal with that issue.

How to Choose the Best Home Loan and Avoid Mistakes

In Pakistan, there are many choices for home loans. Every bank has opened the opportunity for mortgage loans with different markup policies. Before home finance you should have to be aware of all home loan packages. Some of the loan packages are discussed there.

The Government of Pakistan’s central bank; State Bank itself offers home loans on behalf of Mera Pakistan Mera Ghar Housing Scheme – government home loan scheme. According to that, customers can choose financing tenor from 5 year to 20 year. They will help you in purchasing a house/flat/apartment, give you convenience in purchasing a plot and construction there upon, give extension facility in pre-owned housing units and help you in construction on already owned plots.

Eligibility Criteria for Government Home Loan:

  • Pakistani Nationality with valid CNIC and NICOP
  • First time house owner
  •  One individual can have subsidized house loan facility under this scheme only for once
  • For Naya Pakistan Housing and Development Authority (NAPHDA) projects, NAPHDA will shortlist the eligible candidate and upon request of candidate, will forward the candidate profile to banks for financing

Islamic Home Finance Facility in Pakistan:

Islamic Banks in Pakistan also provide the facility for Islamic house finance. They offer a completely; interest (Riba) free-solution to your home financing needs. Unlike a conventional house loan, this loan helps you to secure your wealth from riba. The profit margin is directly correlated to market trends to provide a competitive product to our customers. Shariah allows the use of any conventional market factor as a benchmark to determine the profit rate of a particular product. The mere fact that the applied profit rate of our product is based on similar factors used in determining the applied rate of interest of a mortgage does not render the transaction or the contract invalid from the Shariah perspective, and neither does it make the transaction an interest-bearing one. On the other hand, it is the underlying structure of the product that determines its Shariah compliance. Two types of Loan can be availed:

For Government Project by SBP

  • Up to Rs. 2.7 million can be financed under this category
  • Financing is available for house measuring up to 125 Square Yards (5 Marla) with maximum covered area of 850 Square Feet
  • Flat/apartment with maximum covered area of 850 square feet will be financed
  • To be eligible under MPMG, maximum price (Market Value) of a single housing unit at the time of approval financing shall not exceed Rs. 3.5 million

For Private Project by Microfinance Banks:

  • Microfinance banks can provide up to Rs. 2 million financing to eligible borrowers

For Private Projects by Commercial Banks:

  • Financing of up to Rs. 10 Million can be availed under this scheme
  •  Financing amount is dependent on the size of residential unit
  •  Up to Rs. 6 Million financing can be availed for a house measuring up to 5 Marla (125 Square Yards) and for a flat/apartment with the size up to 1,250 Square Feet


After going through the above Article, we assume that it is very important for individuals to get market research regarding the policies and documentation before home finance in Pakistan. Beside that we should engage with property management agencies to lead us in a secure way. Al Raheem Associates is one of the best real estate agencies in Islamabad, which helps the people to invest in a secure way. For More Information and Detail Visit: or contact us on: 0335 5770043