How and Where to Apply for Home Loans in Pakistan

Purchasing a home tops the priority list for many families in Pakistan, but skyrocketing real estate rates have placed properties beyond the reach of most buyers without financing help. Securing a home loan is emerging as the key route for turning the dream of owning your residence into reality. 

However, navigating the world of mortgages and home lending for the first time can overwhelm even well-informed applicants. This article provides a step-by-step guide on how and where to apply for home loans in Pakistan.

Choosing the Right Bank or Financial Institution

When applying for a home loan, the first step is selecting the right bank or financial institution. Some of the vital banks and institutions providing home loans in Pakistan include:

  • Local banks like Habib Bank Limited, United Bank Limited, and National Bank of Punjab
  • Islamic banks like Meezan Bank, Dubai Islamic Bank, MCB Islamic Bank
  • Specialized housing finance companies like House Building Finance Company Limited (HBFC)


Collecting the Required Documents

Collecting the Required Documents

Once you have shortlisted a bank or financial institution, the next step is to collect the required paperwork. Having these documents ready will speed up the home loan approval process. Typical documents needed when applying for a home loan in Pakistan are:

  • Duly filled home loan application form
  • Copy of CNIC
  • Last 3 months’ salary slips
  • Bank statements for the last 6 months
  • Property documents if you already own a plot or house
  • Details of collateral you will provide against the loan

Selecting House Design and Build Partners

Selecting House Design and Build Partners

After you are ready to take out a loan for your home, the next step is finding reliable construction partners. Finding an experienced construction company is vital when it comes to constructing your home. Pakistan has the best construction companies operating locally and internationally.

Renowned companies like ZEM Builders have expert architects and designers who can take such contemporary design aspirations and bring them from paper to reality with finesse.

Once you have a trustworthy construction partner, the next step is deciding on the home design. When exploring home construction ideas in Pakistan, some top choices include minimalist designs, open floor plans, and layouts that maximize space utility.

Determining Loan Eligibility  

Whether you qualify for a home loan and how much you can borrow will depend on your income, credit score history, and property documents. 

Most banks allow borrowing capacity between 10-20 times your monthly income. Salaried individuals have to provide salary slips and tax returns while business owners need to show audited financial statements.

A good credit rating increases the chances of loan approval and allows for negotiating better terms. Banks look at your past credit history and credit score to determine your reliability as a borrower. 

If you already own a plot or house, banks accept it as collateral which improves your eligibility. Owning property shows banks you have assets of value, which they can use as security if you default on repayment. 

Mortgage approved sheet

Selecting a Mortgage Product

Pakistani banks offer various types of home loan products. You need to select the one aligned with your budget and needs. Some options are:

Fixed-rate mortgages: Same interest rate for entire loan tenure

Variable rate mortgages: Interest rate linked to KIBOR (Karachi InterBank Offered Rate)

Hybrid mortgages: Fixed for initial years, variable rate afterward

Interest-only mortgages: Only interest paid initially, principal paid later

Assessing Affordability

Once pre-approved, you must realistically assess your repayment ability before finalizing the loan amount. Factors determining affordability include:

  • Opt for an amount where installments would be 25-30% of your monthly income.
  • Longer tenure (up to 20 years) reduces monthly payments.
  • Taxes and insurance 

Loan application

Submitting Home Loan Application

After determining the optimum loan amount and mortgage product, the next step is formally submitting the home loan application. You can apply by visiting your selected bank’s branch and submitting your application form and documents. It allows for any clarifications needed.

Using online portals and apps of banks offering end-to-end digital lending is also an option. For example, upload your documents on UBL’s digital app and apply from the comfort of your home.

Engaging agents and advisors to find your best deals is another way. Reputable advisors like Loan Asaan help compare home financing options across multiple banks and negotiate better profit rates on your behalf.

Launch of MPMG Home Loan Program

The Mera Pakistan Mera Ghar (MPMG) program was launched in 2020 by the Government of Pakistan to promote affordable housing access, especially for low to middle-income segments. This government subsidy scheme executed by the State Bank of Pakistan in collaboration with NAPHDA offers meager mark-up rates on home loans, for buying plots, constructing, extending, or improving houses and flats.


Purchasing or building your dream home requires prudent financial planning. This guide provides a clear framework for prospective homeowners to apply for home loans in Pakistan with favorable terms. So embark on your journey of owning your own home.