Percentage of Loan for housing finance has been increased by State bank of Pakistan (SBP) in its policy, from Rs.83 billion to Rs.250 billion by the year 2021.
The number of borrowers of housing finance will increase from the current 68,000 to 200,000. This will help the public in purchasing houses across country anywhere.
To help the mortgage industry the central bank has decided upon low-cost housing finance, and it adheres to international practices and market conditions.
According to this policy, the maximum income of borrower i.e. monthly should not be more than Rs.60,000.
SBP will introduce a subsidized financing facility for low-cost housing by providing liquidity to the financial institutions at a subsidized rate. SBP will provide refinance up to Rs. 1 million or 50% of the loan amount at a rate of 1% to banks/DFIs and the end borrower rate will be 5%.
The remaining 50% of the loan/financing amount shall be provided by the banks/DFIs from their own sources at a fixed rate of up to 12% or variable rate of 1-year KIBOR plus risk premium up to 4%.
The facility will be provided for both individual house borrowers and housing builders/developers. Similar financing facility will also be provided through the Islamic Financial Institutions.
