Home loans in Pakistan: bank rates and eligibility compared

A home loan in Pakistan costs 1-year KIBOR plus 3% to 4% at most banks, repriced once a year. With 1-year KIBOR at 12.73% on 9 October 2026, that is about 15.7% to 16.7% a year. Banks finance 70% to 85% of the property’s value, for up to 25 years, and want a monthly income of Rs 50,000 to Rs 1.5 lakh. All figures come from the banks’ own pages and SBP, as of October 2026.

KIBOR is the Karachi Interbank Offered Rate, the benchmark banks add their margin (the “spread”) to. It moves with the market: SBP’s sheet showed 1-year KIBOR at 12.19% on 4 September 2026 and 12.73% on 9 October 2026. Your instalment changes when the bank reprices.

What is the home loan interest rate at each bank?

The spread is the bank’s margin over KIBOR; most banks here reset KIBOR each year. The “approx. rate” column adds the spread to 1-year KIBOR of 12.73% (6-month KIBOR of 12.41% for MCB) on 9 October 2026. Your bank uses KIBOR from its own reference date, so your rate will differ.

MCB is the only bank here that lowers the spread for a bigger down payment: salaried borrowers pay KIBOR + 3% with under 30% equity, + 2.5% with 30% to under 50%, and + 2% with 50% or more. Meezan and HBL Islamic set a floor of 8% and a cap of 30% on the rate (HBL’s from a 2018 brochure).

How much will the bank finance, and for how long?

So plan on paying 15% to 30% of the price yourself, plus legal, valuation and processing charges. Meezan’s page gives a second, different split lower down (75% salaried, 65% businessmen); we used the figures in its Easy Buyer section.

Who is eligible for a home loan?

Banks also want a work record. Meezan and MCB ask for 2 years in a permanent job and 3 years in business. HBL Islamic’s 2018 brochure asks salaried applicants for 5 years in the same field.

You can usually add family income. Meezan counts 100% of a spouse’s income. Bank Alfalah allows up to two co-borrowers: spouse, parents, children or siblings. Bank AL Habib wants a co-borrower to earn at least Rs 30,000.

Every bank must pull your credit report from SBP’s e-CIB (Electronic Credit Information Bureau) or a licensed private bureau. Clear any overdue payment before you apply.

How much can I borrow on my salary?

SBP’s housing finance rules, updated on 18 August 2026, cap your home loan plus all other consumer loan repayments at 65% of net disposable income.

What documents do I need?

Salaried applicants usually need:

• CNIC copy and 2 photos (plus the co-applicant’s)
• salary certificate and the last 3 salary slips (Meezan)
• 12 months of salary-account statements
• copies of the property papers, once you have chosen a property

Self-employed applicants need 3 years of tax returns (UBL, Meezan) and an NTN certificate (Meezan), plus 2 years of bank statements at UBL. SBP now requires banks to use simplified, standard application forms in Urdu and English, with separate forms for salaried, business and informal-income applicants.

How does the process work?

Bank Alfalah gives an in-principle approval before you pick a property, valid for 60 days.

Islamic home finance vs a conventional home loan

Meezan, HBL Islamic and UBL Ameen use Diminishing Musharakah. You and the bank jointly own the house. You pay rent on the bank’s share and buy its share in units over time until you own the whole house.

The price is still set against KIBOR. In our table, Islamic and conventional rates sit in the same range.

The real differences are in the small print:

• Late payment: UBL Address, a conventional loan, charges a fee of Rs 1,200 per instalment. HBL Islamic and UBL Ameen take a charity payment instead: Rs 1,000 per late instalment.
• Paying early: HBL Islamic sells the bank’s units at a 5% higher price. UBL Ameen adds 8% in year 1, 5% in year 2 and 3% after that. UBL Address charges the same 8%, 5% and 3% on extra payments above 6 instalments. Bank Alfalah allows two part-payments a year (up to 20% of the balance), with 5% charged in year 1. Bank AL Habib says it charges nothing for early settlement.
• Insurance: SBP requires the house to be insured or under takaful for the loan amount. UBL Address and UBL Ameen pay for it; MCB says it is mandatory.

For a wider look at Islamic banks, see Meezan Bank vs other banks.

What did SBP change in 2026?

SBP’s revised housing finance rules took effect immediately on 18 August 2026. The main limits:

• maximum tenure 30 years
• maximum loan-to-value 90%
• repayments capped at 65% of net disposable income
• for loans up to Rs 50 lakh, a lien on land records, including a PLRA Green Property Certificate in Punjab, can replace a full mortgage
• banks must disclose all fees, prepayment penalties and the annual percentage rate before you sign

These are ceilings. In October 2026 the banks we checked still offered at most 25 years and 70% to 85% financing.

Can overseas Pakistanis get a home loan?

Yes, at several lenders, with stricter terms. HBL Islamic takes salaried non-residents earning the equivalent of Rs 4 lakh a month, at 1-year KIBOR + 4%. Bank Alfalah asks for USD 3,000 a month at KIBOR + 4%. MCB’s variant needs Rs 5 lakh a month and a local co-borrower. HBFC lends non-residents up to 85% at KIBOR + 3%, aged 23 to 60.

If you have a Roshan Digital Account, see investing through a Roshan Digital Account, which covers Roshan Apna Ghar.

Is there a government home loan scheme?

Yes. Under the Prime Minister’s Apna Ghar Scheme, banks lend up to Rs 1 crore for 20 years at a fixed 5% for the first 10 years, with no processing fee and no prepayment penalty. SBP officials gave these terms at a media briefing reported by Profit on 24 July 2026; we couldn’t open SBP’s own release. See government housing finance schemes.

Before you borrow against a plot or house, check the society’s approval status: see our property guides.

More guides: Loans & Home Finance, best bank in Pakistan, investment options in Pakistan, Money.