New SBP scheme aims to make housing affordable in Pakistan

By Muhammad MubashirPublished On 25 Sep 2025

Under the initiative, first-time home buyers will be eligible for loans ranging from Rs 2 million to Rs 3.5 million.

According to the central bank, the loan tenure will extend up to 20 years, with a subsidy available for the first 10 years.

All conventional and Islamic banks, microfinance institutions, and the House Building Finance Corporation (HBFC) will participate in providing financing.

Banks will price the loans at KIBOR plus 3 per cent. Borrowers will be able to avail loans of up to Rs 2 million at a 5 per cent rate and up to Rs 3.5 million at an 8 per cent rate. The scheme also waives loan processing fees.

It is to be noted that earlier in July, Economic Coordination Committee (ECC) of the Cabinet approved a mark-up subsidy scheme for 50,000 housing units, with a total budget of Rs72 billion for the current fiscal year.

The scheme is designed to assist first-time homeowners who do not own any property, enabling them to access housing finance with subsidised interest rates.

Under the scheme, eligible individuals holding valid CNICs can avail themselves of housing loans for up to 20 years.

The subsidy offers a 5% fixed interest rate for loans up to Rs2 million, and an 8% rate for loans between Rs2 million and Rs3.5 million for the first 10 years. After the initial period, market rates will apply.