Mera Pakistan Mera Ghar Program
In Pakistan, people can’t think of buying a home as it comes for the cost of millions, and it’s not affordable for an average earner.
For example, if your salary is Rs. 30,000 – 60,000, you can’t think of a home investment. You know you’re only left with no or a minimum saving which is quite low to invest for a new home.
That’s the reason why most of the Pakistanis are happy with the rented homes and apartments. They’re satisfied because they don’t have to invest an initial amount in Millions or Crores for a living. They only have to pay some amount in advance and a fixed monthly rent to continue their living.
But what if we tell you that you can spend the same rental amount to get your piece of land, will you believe?
I know you’re surprised by this, but we have great news for you.
Prime Minister Imran Khan’s government has recently launched “Mera Pakistan Mera Ghar” program to provide shelter to the low income homeless. It’s his initiative to let people have their homes through low and medium cost house financing scheme.
You can also now have your property through this program even though if you’re a low or a medium wage earner. The government has initiated this plan in collaboration with the state bank of Pakistan through subsidized home loans.
The housing loan program is divided into three tiers. You can buy a house unit of up to 125 square yards in the first tier with a covered area of 850 square feet. Tier 2 has the same housing size while in tier 3 you can have up to 250 square yards with a covered area to 1100 square feet.
Price of Housing Units
Maximum Price (Market Value) of a single housing unit at the time of financing approval shall be up to Rs. 3,500,000 in Tier 1 (T1), up to Rs. 3,500,000 in Tier 2 (T2) and up to Rs. 6,000,000 in Tier 3 (T3).
Let’s make this simple!
If you’re a skilled wage earner or low paid salaried person and you want to buy a home of 125 square yards (5 Marla), you can apply for this first tier loan program. Depending on your finances, the banks will pass your loan. Now, if you have been given the loan for 2 M (2,000,000), you can pay it in 10, 15, and 20 years. Adding 10%-15% of your equity, you can manage a flat in a respective multistory building in many cities of the country.
If you choose a 10-year loan plan, the monthly installment for the first 5 years will cost around Rs. 21,000. This is almost equivalent to the rent you would pay for your rented house or apartment. Now, if you can’t afford 21K installments monthly, you can extend your loan term to a 15 years term. Here, in the first five years, the installment will cost you around Rs. 15,800 only. If this is still heavy on your pocket, you have the option to avail of a 20-year loan. Here you will pay a monthly installment of approximately Rs. 13,200. For the next 5 years, you need to pay with a 2% additional cost. And in the next few years, the installments may increase with a 1 % or 2% addition.
The 20-year loan term is super affordable for those who earn up to Rs. 40,000 and want to have their own homes. Following is a table of approximate monthly installments for loans of various amounts and repayment plans.
Tier 1 (T1) Loan
| Amount of Loan | 1,000,000 | 1,400,000 | 1,800,000 | 2,200,000 | 2,400,000 | 2,700,000 |
| 10 Year Plan | ||||||
| Monthly Installment (First 5 years, rate 5% p.a.) | 10,607 | 14,849 | 19,092 | 23,334 | 25,456 | 28,638 |
| Monthly Installment (Next 5 years, rate 7% p.a.) | 11,611 | 16,255 | 20,900 | 25,544 | 27,866 | 31,349 |
| Total Payment (120 instalments) | 1,333,044 | 1,866,262 | 2,399,479 | 2,932,697 | 3,199,306 | 3,599,219 |
| 15 Year Plan | ||||||
| Monthly Installment (First 5 years, rate 5% p.a.) | 7,908 | 11,071 | 14,234 | 17,397 | 18,979 | 21,351 |
| Monthly Installment (Next 5 years, rate 7% p.a.) | 8,988 | 12,584 | 16,179 | 19,774 | 21,572 | 24,268 |
| Monthly Installment (11th Yr) 10% assumed | 10,746 | 15,044 | 19,343 | 23,641 | 25,791 | 29,014 |
| 20 Year Plan | ||||||
| Monthly Installment (First 5 years, rate 5% p.a.) | 6,600 | 9,239 | 11,879 | 14,519 | 15,839 | 17,819 |
| Monthly Installment (Next 5 years, rate 7% p.a.) | 7,753 | 10,854 | 13,955 | 17,057 | 18,607 | 20,933 |
| Monthly Installment (11th Yr) 10% assumed | 9,650 | 13,510 | 17,370 | 21,230 | 23,161 | 26,056 |
And to make it more simple, those living in the rural or in the suburb of cities can build a home with as little as Rs. 1,000,000 housing loan plus personal equity around 10-20% for an instalment of Rs. 6,600 only.
Same goes for the tier 2 and tier 3 investment plans with a slight corresponding increase in the instalments.
The plan is being implemented through all conventional and Islamic banks in the country. The plan can also be availed from House Building Finance Corporation of Pakistan (HBFC) under the banner of Mera Pakistan Mera Ghar. You can apply through your any bank and get your house loan in action.
So, who can apply for this housing schemes?
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Those who don’t have any property under their names. It’s best for first time homeowners.
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Everyone with a computerized national identity card (CNIC).
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You can avail the subsidy under this scheme for one time only.
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The scheme is meant only for construction and first purchase of newly constructed affordable housing units by Naya Pakistan Housing Development Authority (NAPHDA).
The government has also asked the banks not to extend the application process longer than 30 days. So, if you apply for a house loan now, your application can be processed after submitting all the required documents for the program. To minimize the hassle, the form is also available in Urdu format.
What will be the markup rate for the three tiers?
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Borrowers will pay the following markup rates.
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Tier 1: 5% for first 5 years and 7% for next 5 years
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In Pakistan, people can’t think of buying a home as it comes for the cost of millions, and it’s not affordable for an average earner.Tier 2: 5% for first 5 years and 7% for next 5 years
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Tier 3: 7% for first 5 years and 9% for next 5 years
For loan tenors exceeding 10 years, the market rate will be applicable for the period exceeding 10 years.
What is the initiative behind Mera Pakistan Mera Ghar?
You’d have heard the Prime Minister talk about giving a home to the homeless in his conversations. This initiative is practical application to the idea. With Mera Pakistan Mera Ghar, the government wants to make housing reachable for everyone. It shouldn’t be only for the riches but also the small and medium wage earners so they can cut out the rental apartments and have their own living spaces.
So, if you’re living in a rented place now, you can visit your nearest bank and apply for the loan to have your own property in the future.
Isn’t that an excellent step?
For having a detailed estimation of the monthly installments please click to download.