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Govt Launches 20-Year Housing Loan Scheme

Posted by Osamafatehali on October 7, 2025
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Housing Loan Scheme: Govt Launches “Mera Ghar – Mera Ashiana” with 20-Year Affordable Housing Loans

Introduction

The Government of Pakistan has introduced a new Housing Loan Scheme called “Mera Ghar – Mera Ashiana.” This program is designed to make homeownership easier for families by providing long-term subsidized loans with repayment periods of up to 20 years. Targeted at individuals without existing property ownership, the initiative offers a secure and affordable path to owning a house or flat.


Key Features & Eligibility

  • Open to all valid CNIC holders who do not own a house or plot.

  • Financing options under the Housing Loan Scheme include:

    • Buying a house or flat

    • Constructing a house on an owned plot

    • Purchasing a plot and then building on it

  • Property size eligibility:

    • Houses up to 5 marla

    • Apartments up to 1,360 sq. ft.


Loan Structure & Terms

Tier Loan Amount Fixed Interest Rate Notes
Tier 1 Up to PKR 2 million 5% Affordable end-user rate
Tier 2 Above PKR 2 million – PKR 3.5 million 8% Fixed end-user rate
  • Maximum tenor: 20 years

  • Markup subsidy: Available for the first 10 years

  • Equity contribution: 10% from borrower, up to 90% covered by financing

  • Pricing model: 1-year KIBOR + 3% margin

  • No processing fees or prepayment penalties

This Housing Loan Scheme offers one of the most attractive government-backed financing structures for aspiring homeowners.


Risk Mitigation & Oversight

  • The government will cover 10% first-loss on loan portfolios to reduce risk for banks.

  • The State Bank of Pakistan (SBP) has directed participating banks to actively promote the program and prevent misuse.

  • Additional guidelines on subsidy disbursement and risk coverage will be issued to financial institutions.


Participating Institutions

The Housing Loan Scheme is available through:

  • Commercial banks

  • Islamic banks

  • Microfinance banks

  • House Building Finance Company Limited (HBFCL)

With multiple banking channels, accessibility across Pakistan is ensured.


Implications & Outlook

The launch of this Housing Loan Scheme represents a game-changing step in Pakistan’s real estate and housing sector. With fixed low rates, long repayment terms, and government-backed risk sharing, the initiative makes homeownership a reality for low- and middle-income families.

If executed effectively, Mera Ghar – Mera Ashiana will not only ease the housing crisis but also drive growth in the real estate sector nationwide.

Shahnawaz Yaqub Bhatti
Investment Consultant and CEO at Imlaak

  • Mobile: +92 333 1717170 (WhatsApp)
  • Mobile: +92 333 1616160 (WhatsApp)

 

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