featured_mode: card | illustrationMost Pakistani banks lend for homes to applicants aged 25 or over with two to three years of stable income and a minimum monthly income of roughly Rs60,000–150,000, pricing the loan at 1-year KIBOR (12.09% in August 2026) plus about 3–4%, repriced yearly.
Key takeaways
- Banks price home loans at KIBOR plus a spread. On 10 August 2026, 1-year KIBOR offer was 12.09%, so salaried borrowers at KIBOR + 3% were paying about 15.09%.
- Typical entry rules: age 25 or more, two years in a job (three years in business), and a minimum net income of roughly Rs60,000 to Rs150,000 a month depending on bank.
- The SBP caps total consumer repayments at 65% of net disposable income, but most banks use 40–50%.
- A Rs3 crore loan over 20 years at 15.09% costs about Rs397,000 a month.
- The government's subsidised scheme lends up to Rs1 crore at a fixed 5% for the first ten years, for first-time owners.
Quick answer
To get a home loan in Pakistan, pick a bank whose minimum income and age rules you meet, gather two to three years of income proof, and find a property with clean title. The bank will lend up to its financing ratio (usually 65–85% of appraised value), price the loan at 1-year or 6-month KIBOR plus a spread, and reprice it each year.
The SBP's 2026 Prudential Regulations allow up to 30-year tenors and a 90:10 loan-to-value ratio (SBP PRs, updated 18 Aug 2026). Bank products are stricter than that ceiling.
Who is eligible
| Bank (product) | Age | Min net income | Job/business tenure | Pricing |
|---|---|---|---|---|
| Bank AL Habib (House Finance) | 25 to 60 salaried, 65 self-employed, at maturity | Rs60,000 salaried; Rs100,000 others | 2 yrs salaried/SEP; 3 yrs SEB | 1-yr KIBOR + 3% salaried; + 3.5% others |
| MCB (Home Loan) | 25 to 65 or retirement | Rs75,000 salaried; Rs100,000 self-employed | 2 yrs salaried; 3 yrs self-employed | 6-month KIBOR + 2–3% salaried, by equity |
| Bank Alfalah (Home Finance) | 25 to retirement salaried; 25 to 70 others | Rs75,000 salaried; Rs150,000 others | 2 yrs permanent; 3 yrs business | 1-yr KIBOR + 3% salaried; + 4% others |
| UBL (Address) | 21 to 65 | Rs150,000 | 2 yrs employment | KIBOR + 3.5% salaried; + 4% SEB/SEP |
Sources: Bank AL Habib, MCB, Bank Alfalah, UBL. Bank pages as opened in October 2026.
The debt burden test
Income is checked against all your repayments. The SBP limit is 65% of net disposable income, including the new loan and every other consumer loan (SBP PRs). Bank AL Habib applies 50% (Bank AL Habib). Clear your car loan or credit card balance before applying if you are near the line.
Co-borrowers
Most banks let you add a spouse or close relative. Bank AL Habib accepts a co-borrower with at least Rs30,000 net income. MCB makes a local blood-relative co-borrower mandatory.
Documents
The SBP's simplified forms cover salaried, business and informal-income borrowers (SBP PRs). In practice banks ask for:
| Salaried | Self-employed / business |
|---|---|
| Application form, CNIC, photographs | Application form, CNIC, photographs |
| Salary slips (last 3 months) | Business proof (2–3 years) |
| Employment proof or letter (2 years) | 12 months of bank statements |
| 6–12 months of bank statements | Tax returns; audited accounts if any |
| Declaration of existing loans | Declaration of existing loans |
| Property title documents | Property title documents |
For the property itself, expect the bank's legal team to ask for the fard or registry, mutation and society transfer papers, and a valuation. Loans above Rs1 crore need a valuer from the PBA-approved panel (SBP PRs).
How KIBOR changes your payment
KIBOR is the benchmark. Your rate is KIBOR plus the bank's spread, and the spread is usually fixed for the tenor.
On 10 August 2026, the SBP's published KIBOR offer was 11.76% for six months and 12.09% for one year (SBP KIBOR). The policy rate was held at 11.5% on 14 September 2026 (ARY News).
Bank AL Habib reprices on each loan anniversary, so a change in KIBOR moves your installment once a year (Bank AL Habib). On a Rs3 crore, 20-year loan:
| 1-yr KIBOR | Rate (KIBOR + 3%) | Monthly installment |
|---|---|---|
| 10.09% | 13.09% | about Rs353,000 |
| 11.09% | 14.09% | about Rs375,000 |
| 12.09% (Aug 2026) | 15.09% | about Rs397,000 |
| 13.09% | 16.09% | about Rs419,000 |
Our calculation uses standard amortisation for the full term at each rate. Every one-point rise adds roughly Rs22,000 a month at this size.
Worked example (10 marla house)
Take a 10 marla house in Bahria Town Lahore. Houseplot's indicative price data (Jun–Aug 2026) puts these at roughly 3.66–4.22 crore. Assume an agreed price of 4 crore inside that range.
- Financing ratio. Bank AL Habib lends the lower of 75–85% of appraised value on built homes. Assume 75%: Rs3 crore loan, Rs1 crore down payment.
- Rate. Salaried at 1-yr KIBOR + 3% = about 15.09%.
- Tenor. 20 years.
- Installment. About Rs397,000 a month.
- Income needed. At a 50% debt-burden limit, net income of at least about Rs794,000 a month, with no other loans.
- Upfront costs on top. For a filer: 236K at 1.25% of FMV (Rs500,000 on 4 crore), stamp duty at 1% of DC value, PLRA e-registration at 0.1% (FBR rate card; APP). Banks also charge processing, valuation and insurance.
If that income is out of reach, the subsidised scheme is worth checking. It finances up to Rs1 crore at a fixed 5% for the first ten years, over up to 20 years, for first-time owners, for houses up to 5 marla or flats up to 1,500 sq ft (ProPakistani, Mar 2026). On Rs1 crore at 5% over 20 years, our calculation gives about Rs66,000 a month during the fixed period.
Approval timeline
| Stage | What happens | Time stated by sources |
|---|---|---|
| Application and income check | Documents, credit bureau | Varies by bank |
| Legal and valuation | Title search, valuer visit | Varies by property |
| Offer and disbursement | Pay order to seller | 21–25 working days end to end at Standard Chartered Saadiq |
| Government scheme response | Bank decision on application | Within 15 days |
Sources: Standard Chartered Saadiq; Profit, Jul 2026. Title problems are the usual cause of delay, so verify ownership before you apply.
Common mistakes
- Applying before clearing small loans that push your debt burden over the bank's limit.
- Choosing a property whose title the bank cannot verify, such as an unapproved scheme.
- Comparing only the first-year rate and ignoring annual repricing.
- Forgetting prepayment charges. Bank AL Habib charges none; some Islamic products charge on early buyout.
Bottom line
Start with the debt-burden maths, not the house. Work out what 50% of your net income covers at today's KIBOR plus 3%, then add a one-point buffer for repricing. That figure, divided into the bank's financing ratio, tells you your real budget.
This guide is general information; confirm current rates with FBR/the bank/a lawyer before you pay.
Sources
- Prudential Regulations for Housing Finance 2026 — SBP — LTV, tenor, DBR, documents, valuation
- KIBOR rates, 10 August 2026 — SBP — KIBOR
- SBP retains interest rate at 11.5% — ARY News — policy rate
- Housing Finance — Bank AL Habib — eligibility, pricing, DBR, ratios
- Home Loans — MCB — eligibility, pricing
- Home Finance — Bank Alfalah — eligibility, pricing, documents
- UBL Address — eligibility, pricing, documents
- Saadiq Home Finance — Standard Chartered — processing time
- Govt reduces markup rate for housing finance scheme — ProPakistani — 5% scheme terms
- Housing finance hits Rs293bn — Profit — 15-day response rule
- FBR Withholding Tax Rate Card 2027 — 236K
- PLRA revised service charges — APP — e-registration fee