Government brings down markup rate for home loans

Federal government greenlit smart updates to the Markup Subsidy and Risk Sharing Scheme for cheap home loans on Friday.

The Housing and Works Ministry sent out the official notice after the Economic Coordination Committee okayed it and the cabinet stamped approval. First-time Pakistani buyers with valid CNIC cards stay eligible. No one qualifies if they already own a house. The plan covers buying homes or flats, building on owned land, or grabbing a plot and then constructing.

House sizes cap at 5 marla homes or 1500 square-foot apartments. Banks, Islamic lenders, microfinance outfits, and the House Building Finance Company jump in to offer loans. Big wins shine through: maximum loan jumps to Rs 10 million. Repayment stretches 20 years, with government covering markup costs for the first 10. Banks charge one-year KIBOR plus 3 percent, but buyers pay a steady 5 percent rate across the board. Old Tier-2 rates drop to match.

Loan-to-value stays at 90:10—90 percent from banks, 10 percent from your pocket. Government adds 10 percent risk cover on first losses to ease bank worries. The push funds 500,000 homes over four years: 50,000 in 2025-26, 100,000 next, 150,000 after, and 200,000 by 2028-29. The State Bank of Pakistan leads the rollout with housing authority and banks.

Old 8 percent loans shift to 5 percent for fairness. Finance Ministry, SBP, and lenders hustle to launch fast. Dreamers cheer easier paths to roofs over heads. Families save big on rates amid tight budgets. Government bets on homes to spark jobs and growth. This fix clears hurdles, drawing millions into ownership. Banks line up ready. Pakistan builds stronger futures, one house at a time.