A major push for affordable housing is underway with the government’s introduction of ‘Mera Ghar – Mera Ashiana’. Launched on Wednesday, the initiative provides long-term, subsidized home loans through a framework that includes a markup subsidy and government risk-sharing.
According to the State Bank of Pakistan (SBP), the scheme is intended for all citizens who do not currently own a property and hold a valid CNIC. It covers housing units of up to five marla or apartments up to 1,360 square feet.
The initiative simplifies home ownership by offering financing for purchasing a ready house or flat, or for constructing a house on an owned plot.
Loan Structure and Benefits
The program's defining feature is its affordability, backed by government subsidy for the initial 10 years of the loan term:
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Loans up to Rs2 million are secured at a low, fixed end-user rate of 5%.
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Loans between Rs2 million and Rs. 3.5 million are available at a fixed rate of 8%.
With a maximum loan tenor of 20 years and a low 10% borrower equity requirement, the scheme aims to keep monthly payments minimal. Furthermore, borrowers face no processing charges or prepayment penalties.
The government is incentivizing banks to participate by covering 10% of the first loss on the portfolio. The SBP has directed all Participating Financial Institutions (PFIs)—including commercial, Islamic, and microfinance banks, along with HBFCL—to ensure the scheme is effectively promoted and monitored to prevent misuse.
