The Government of Pakistan has announced a major change to its affordable housing program to make homeownership easier for many families.
The Economic Coordination Committee (ECC), acting on the prime minister’s direction, cut the home loan interest rate under the “Mera Ghar Mera Aashiana” low-cost housing scheme to 5 percent from the earlier 8 percent. This move is designed to help up to 500,000 households access low-cost homes over the next four years.
The low-cost housing plan has been one of the government’s key efforts to tackle the shortage of affordable homes in big cities like Karachi, Lahore, and Islamabad. Under the revised scheme, the maximum loan amount has also been increased from Rs. 3.5 million to Rs. 10 million, so buyers can now finance larger houses and more modern flats.
Detached homes up to 10 marlas (2,720 square feet) and apartments up to 1,500 square feet are now eligible for financing through this program.
Officials say that the State Bank of Pakistan (SBP) will continue to oversee implementation of the program through a risk-sharing and subsidy framework. The uniform 5 percent interest rate now applies to all borrowers, including earlier applicants who had paid higher rates.
Since its launch, banks have reported a strong response from the public. More than 10,500 applications have been filed, requesting about Rs. 32 billion in loans, and 344 loans totaling roughly Rs. 810 million have already been approved.
Experts say the lower interest rate could boost demand for housing finance, stimulate activity in the construction and real estate sectors, and create jobs in related industries like building materials and services.
If these outcomes hold, the housing push may also support broader economic growth in Pakistan.