The State Bank of Pakistan's monetary easing cycle has lowered the benchmark policy rate, directly reducing the cost of commercial mortgage borrowing across Pakistani commercial and Islamic banks. As benchmark 1-year KIBOR rates adjusted downward, banks including Meezan Bank, HBL, Bank Alfalah, and Standard Chartered have updated their housing finance products.
Under the revised terms, monthly installment payments on a standard 10-year, PKR 1 Crore home loan have dropped by over 18% compared to peak financing periods in 2024. This change has brought monthly installments back into reach for salaried professionals looking to buy 3 Marla and 5 Marla homes.
Simultaneously, the Roshan Apna Ghar scheme for non-resident Pakistanis has recorded an uptick in applications, particularly from expats in the UAE, Saudi Arabia, and the UK. Expats are taking advantage of simplified digital processing and tax exemptions to finance ready-to-move apartments and villas in Islamabad, Lahore, and Karachi.
Mortgage advisors recommend that borrowers opt for Islamic diminishing musharaka financing structures with flexible partial prepayment clauses to optimize total interest expenses.
