Which Bank Is Best For House Loan In Pakistan [Sharia Compliant]

Are you wondering, which bank is the best for house loan in Pakistan?

Well, we have gathered all the data and compared the top banks in Pakistan that provide Sharia-compliant home loans in Pakistan.

The following table provides a comprehensive comparison of the home loan offerings from Meezan Bank, Bank Islami, Bank Alfalah, and HBL, highlighting key features and eligibility criteria for potential borrowers:

Feature	Meezan Bank	Bank Islami	Bank Alfalah	HBL
Type of Financing	Islamic Home Financing	Musharakah Home Finance Scheme	Alfalah Islamic Ghar Asaan	Islamic Home Finance
Eligibility Criteria	Pakistani Citizen	Pakistani Citizen	Pakistani CNIC Holder	Pakistani Citizen
Age Requirement	Salaried: 25-65 Years; Self-Employed: 30-65 Years	Not specified	Not specified	Salaried: 25-60 Years; Self-Employed: 30-65 Years
First-Time Homeowner	Not specified	Not specified	Not specified	Yes
Financing Limit	Not specified	Up to PKR 50 million	Not specified	Between PKR 2,000,000 to PKR 100,000,000
Financing Period	Not specified	Up to 20 years	Minimum 5 years to maximum 20 years	3 to 25 years
Co-Applicants Allowed	Not specified	Not specified	Not specified	Not specified
Maximum Property Value	Not specified	Not specified	Not specified	Not specified
Maximum Financing	Up to 75% of property value	Maximum up to PKR 50 million	Not specified	Up to 70% of property value
Pricing Mechanism	Variable Pricing Rate	Profit Rate Linked to KIBOR	Fixed Rate for First 5 Years; Market Rate thereafter	Fixed Rental Rate of 20.61% for the First 3 Years
Financing Purpose	Purchase, Construction, Renovation, Replacement	Purchase, Construction, Renovation, Replacement	Purchase, Construction, Renovation, Extension/Expansion	Purchase of completed residential property, Construction of house including land purchase, Renovation of house/apartment, Replacement of existing mortgage facility
Takaful Coverage	Shariah-compliant life Takaful facility	Not specified	Not specified	Property and life takaful

In the following guide, we will compare the house loan offerings of the top banks of Pakistan and we will help you choose the best bank for your needs.

So, keep reading until the end and you will find your perfect match. Here we go!

Recommended Reading: House Loan In Pakistan | Interest-free Home Loan In Pakistan

Which Bank Is Best For House Loan In Pakistan (Get 5-50 Lakh Home Loan) [Sharia Compliant]

Table Of Contents

• Which Bank Is Best For House Loan In Pakistan (Get 5-50 Lakh Home Loan) [Sharia Compliant]
  • Comparison Of Banks For House Loans In Pakistan
  • Comparison Of NBP And HBL Home Loan
  • Islamic Banking Principles And Home Financing
  • Meezan Bank Home Loan (Easy Home Financing)
  • Key Features of Meezan Easy Home Financing
  • Eligibility Criteria For House Loan In Pakistan
  • Meezan Easy Home Financing Products
  • Payment Plans for Meezan Easy Home Financing
    • UMI Model:
    • Step-up Model:
  • Profit Rate for Meezan Easy Home Financing
  • Shariah Compliance of Meezan Easy Home Financing
  • Application Process for Meezan Easy Home Financing
  • Processing Charges for Meezan Easy Home Financing
  • Contact Details of Meezan Bank
  • FAQs | House Loan In Pakistan

Comparison Of Banks For House Loans In Pakistan

To help you choose the best bank for home loans we will compare the top 3 banks of Pakistan that offer home loans.

The following is a detailed comparison table of home loans offered by Meezan Bank, Bank Islami, and Bank Alfalah:

Here’s a detailed comparison table of home loans offered by Meezan Bank, Bank Islami, and Bank Alfalah:

Features	Meezan Bank Easy Home	Bank Islami MUSKUN Home Financing	Bank Alfalah Islamic Ghar Asaan
Financing Structure	Diminishing Musharakah (Joint Ownership)	Diminishing Musharakah and Ijarah	Conventional Home Financing
Maximum Financing Amount	Highest	Varies by customer’s eligibility	Varies by customer’s eligibility
Financing Tenure	Up to 25 years	Up to 25 years	Up to 20 years
Maximum Financing Limit	Up to 75% of property value	Up to 85% for salaried, 80% for others	Varies by customer’s eligibility
Prepayment Option	Available	Available	Available
Eligibility Criteria	Citizenship, age, income, employment	Citizenship, age, income, employment	Citizenship, valid CNIC, first-time homebuyer
Sharia Compliance	Shariah-compliant	Shariah-compliant	Not specified
Application Process	Detailed process with legal checks	Detailed process with legal checks	Detailed process with legal checks
Interest Rate	Variable, linked to market trends	Subsidized rates for initial years	Subsidized rates for initial years
Financing Range	Varies	Up to PKR 150 million	Up to PKR 10 million
Payment Plans	UMI Model and Step-up Model	Not specified	Not specified
Additional Features	Shariah-compliant life Takaful,	Flexible installments, clubbing of income	Personalized advisory, end-to-end processing
	Partial pre-payments allowed	No negative area	Subsidized profit rates for initial years
	Affordable monthly rentals

Comparison Of NBP And HBL Home Loan

The comparison table summarizes the key features and eligibility criteria of home loans offered by the National Bank of Pakistan (NBP) and Habib Bank Limited (HBL):

Feature	NBP Home Loan	HBL Home Loan
Type of Financing	Low-Cost Housing Finance Scheme for the Nation	Islamic Home Finance
Eligibility Criteria	Pakistani CNIC Holder	Pakistani Citizen
Age Requirement	25-55 Years	Salaried: 25-60 Years; Self-Employed: 30-65 Years
First-Time Homeowner	Yes	Yes
Financing Limit	Up to PKR 27 million	Between PKR 2,000,000 to PKR 100,000,000
Financing Period	Minimum 5 years to maximum 20 years	3 to 25 years
Co-Applicants Allowed	Up to 4 co-applicants for income clubbing	Not specified
Maximum Property Value	Tier-1: Rs. 3.5 million; Tier-2: No Limit; Tier-3: No Limit	Not specified
Maximum Financing	Tier-1: Up to PKR 27 million; Tier-2: Up to PKR 6.0 million; Tier-3: Up to Rs. 10.0 million	Up to 70% of property value
Pricing Mechanism	First 5 Years: Fixed Rate (3%, 5%, 7%); Exceeding 10 Years: Market Rate	Fixed Rental Rate of 20.61% for the First 3 Years
Financing Purpose	Purchase of constructed residential property, Plot purchase + construction, Extension/Expansion of self-owned residential property	Purchase of completed residential property, Construction of house including land purchase, Renovation of house/apartment, Replacement of existing mortgage facility
Takaful Coverage	Not specified	Property and life takaful

Islamic Banking Principles And Home Financing

Islamic banking operates on the principles of Sharia, which prohibits the payment or receipt of interest (Riba) and promotes ethical and socially responsible financial transactions.

Islamic home financing typically operates through structures such as Musharakah (partnership), Ijarah (lease), and Murabaha (cost-plus sale).

Unlike conventional banking systems that rely on interest-based transactions, Islamic banks operate on the principles of fairness, risk-sharing, and ethical conduct.

Here’s how Islamic banking principles are incorporated into home financing:

Principle	Description
Sharia Compliance	Home financing products adhere to the principles of Sharia law, ensuring transactions are halal.
Riba Prohibition	Interest-free financing ensures borrowers do not incur interest charges, in line with Islamic ethics.
Profit-Sharing	Financing agreements involve profit-sharing between the bank and the customer, fostering a partnership-based approach.
Asset-Backed Transactions	Financing is secured against tangible assets such as the property itself, minimizing speculative practices.

Upon careful comparison of all the top banks, we have short-listed Meezan Bank as the best bank for home loans in Pakistan.

The following is a detailed overview of the home loan scheme of Meeezan Bank Pakistan

Meezan Bank Home Loan (Easy Home Financing)

Meezan Easy Home Financing offers an interest (Riba) free solution for home financing needs. The financing operates on the principle of Diminishing Musharakah, where the customer and Meezan Bank engage in joint ownership of the property.

Unlike conventional loans, Easy Home is based on co-ownership rather than a loan agreement, ensuring Shariah compliance. Meezan Bank shares the cost of the property, establishing joint ownership, and gradually transferring ownership to the customer.

Key Features of Meezan Easy Home Financing

• Highest Financing Amounts: Meezan Bank offers some of the highest financing amounts in the market, ensuring customers can secure the funding they need for their dream home.
• Maximum Finance against Property Value: Customers can finance a significant portion of the property value, making it easier to purchase their desired home.
• Flexibility to Make Partial Pre-payments: The financing solution provides the flexibility for customers to make partial pre-payments, helping them reduce their outstanding balance and overall financing costs.
• Shariah-Compliant Life Takaful Facility: Meezan Bank offers a Shariah-compliant life Takaful facility, providing customers with insurance coverage that aligns with Islamic principles.
• Affordable Installments and Regularly Reducing Monthly Rental: The financing plan is structured to offer affordable monthly installments, with the rental portion reducing regularly as the customer’s equity in the property increases.

Eligibility Criteria For House Loan In Pakistan

• Citizenship: Pakistani nationals, both residents and non-residents, are eligible for the financing according to the bank’s policy.
• Age Criteria: Applicant & co-applicant (with income clubbing) Minimum 25 years and maximum 65 years. Co-applicant (without income clubbing) Minimum 21 years and maximum 70 years. *For salaried individuals, the applicant’s age must not exceed 65 years or the retirement age. The normal retirement age is considered as 60 years if not specified otherwise.
• Customer/Applicant: Primary (or Single) & Co-applicants allowed. Co-applicant must be an immediate family member*, including spouse, parents, adult children, brothers, and sisters only.
• Income Criteria: Salaried & Self-Employed Professional (SEP) Minimum Gross Income of PKR 50,000** per month. 100% co-applicant’s income may be clubbed in the case of spouse only. Self-Employed / Business Person Minimum Gross Income of PKR 100,000 per month. *Self Employed Professional includes doctors, engineers, auditors & architects. **For contractual employees, a minimum of PKR 100,000 per month is required.
• Employment Tenure: Permanent job with a minimum of 2 years continuous work history in the same industry/field. For contractual employment, a minimum of 2 years continuous work history in the same industry/field along with having a total experience of 4 years.
• Self-Employed / Business Person: Minimum 3 years in the current business/industry.

Meezan Easy Home Financing Products

• Easy Buyer: Choose Easy Buyer for a ready-to-move-in home financing solution.
• Easy Builder: For those looking to build their dream home, Easy Builder offers the ideal financing option.
• Easy Renovate: Whether you want to enhance your home or simply repair it, Easy Renovate provides the necessary financing.
• Easy Replace: Transfer your existing mortgage to Meezan Bank with Easy Replace.
• Easy Enhancement: Enhance your existing facility with Easy Enhancement, tailored to meet your evolving needs.

Payment Plans for Meezan Easy Home Financing

UMI Model:

Structured under the concept of Diminishing Musharakah. The bank and customer enter into a Musharakah Agreement and both parties provide investments for property purchase/construction/renovation.

Joint ownership is created in the property between Bank & customer. Bank’s share divided into units given to the customer on rent; the customer purchases the Bank’s share (units) over the transaction tenure.

Step-up Model:

Intended for customers seeking maximum financing with lower initial installments. Based on Shariah-compliant Diminishing Musharakah structure.

A monthly installment in initial years is lower, making it easily affordable. Shariah-compliant alternative for customers seeking maximum financing from the Bank.

Profit Rate for Meezan Easy Home Financing

Meezan Bank’s profit margin is directly linked to market trends to offer competitive rates. Shariah allows the use of conventional market factors as benchmarks for profit rate determination.

• Salaried Customers:
• Variable Pricing Rate:
  • Fixed for 1st Year: K* + 3.00% p.a.
  • Annual Re-pricing: K** + 3.00% p.a. (Floor 8.00% p.a. and Cap 30% p.a.)
• * For the first-year Fixed Rate, ‘K’ denotes KIBOR (Karachi Inter Bank Offer Rate) announced on the 1st working day of each calendar month.
• ** Applicable KIBOR will be 12-month KIBOR announced on the first working day of the month of profit rate revision.

• Businessmen Customers:
• Variable Pricing Rate:
  • Fixed for 1st Year: K* + 4.00% p.a.
  • Annual Re-pricing: K** + 4.00% p.a. (Floor 8.00% p.a. and Cap 30% p.a.)
• * For the first-year Fixed Rate, ‘K’ denotes KIBOR (Karachi Inter Bank Offer Rate) announced on the 1st working day of each calendar month.
• ** Applicable KIBOR will be 12-month KIBOR announced on the first working day of the month of profit rate revision.

Shariah Compliance of Meezan Easy Home Financing

• Diminishing Musharakah Structure: Easy Home operates through the Diminishing Musharakah, complying with Shariah laws related to financing, ownership, and trade.
• Joint Ownership and Transfer of Ownership: Joint ownership is created, and ownership is gradually transferred to the customer instead of just lending money, ensuring Shariah compliance.
• Financing Terms:
• Meezan Bank finances up to 65% and 75% of the property value for businessmen and salaried individuals, respectively.
• Monthly Payment Structure: Customers agree to a monthly payment to the Bank, part of which is for using the house and part for purchasing the bank’s share in the house.
• Ownership Transition: Upon completing the agreed-upon payment, the customer becomes the sole owner with a free and clear title to the property.
• Profit as Payment for Use: The profit charged by the Bank is considered payment for using its share of the house during the contract’s life.

Application Process for Meezan Easy Home Financing

1. Submit a filled and signed application form to Meezan Bank along with the required cheque for Processing Fees & External Agency costs.
2. Attach the required documents with your application.
3. Meezan Bank will verify your residential/office addresses.
4. For Salaried Self-Employed professionals/businessmen, Meezan Bank will conduct necessary credit assessments and associated due diligence based on provided information.
5. Meezan Bank will obtain a legal opinion on the property documents provided by you.
6. Meezan Bank’s appointed valuation agency will evaluate the property to determine its market value.
7. After fulfilling all credit requirements, Meezan Bank will issue a conditional offer letter.
8. Upon approval, open an account at Meezan Bank.
9. After approval and account opening, sign the Islamic House Finance Agreement and other legal documents at Meezan Bank.
10. A Meezan Bank officer and authorized lawyer will accompany you and the seller of the property to the appropriate bank or registrar’s office for property transfer.

Processing Charges for Meezan Easy Home Financing

• Type of Charges:
  • Salaried: PKR 8,000
  • Businessmen: PKR 8,000
• FED on Processing Charges @ 16%:
  • Salaried: PKR 1,280
  • Businessmen: PKR 1,280
• Legal Report Charges: Charged at actual cost.
• Property Valuation Charges: Charged at actual cost.
• Income Estimation Charges: Not applicable for salaried individuals; charged at actual cost for businessmen.

Contact Details of Meezan Bank

• Website: https://www.meezanbank.com/
• Email: info@meezanbank.com
• Phone: +92 (21) 38103500 & +92 (21) 37133500
• Address: Meezan Bank Limited, Meezan House, C-25 Estate Avenue, SITE, Karachi.

FAQs | House Loan In Pakistan

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