Dwelling in one’s own home is the lifelong dream of many families in Bangladesh. However, with the rising prices of properties and limited liquid funds, purchasing a house outright is beyond the reach of most. Thankfully, numerous home loan schemes in Bangladesh have surfaced over the decades to bridge the gap. Ranging from traditional bank loans to government initiatives and private financial organizations, the avenues for obtaining a home loan in Bangladesh are larger than ever before.
Here, we will discuss the most popular and readily available housing financing facilities in Bangladesh, so you can make an informed decision about owning a home.
1. Home Loans of Commercial Bank
Banks remain the most sought-after and trusted source of home loans in Bangladesh. Home loan products tailored to the individual needs of people to purchase, construct, or renovate houses are offered by most major commercial banks.
Popular Banks Offering Home Loans:
BRAC Bank: Offers home loans up to BDT 2 crore with variable repayment tenure.
Dutch-Bangla Bank: Well-known for offering competitive interest rates and easy processing.
City Bank, Eastern Bank, Standard Chartered: Also offer a variety of home loan schemes based on income level, profession, and property type.
Key Features:
- Up to 25 years loan term
- Up to 70%-80% finance of the property price
- Fixed as well as variable rate of interest option
- EMI repayment
Banks generally consider your income, job stability, and credit history before approving a home loan. Some also offer joint loans for couples or relatives.
2. Non-Banking Financial Institutions (NBFIs)
Of late, non-banking financial institutions have gained greater popularity as a source of mortgage loans in Bangladesh. The institutions offer more flexible terms and customer service quality, albeit with a marginally higher rate of interest than banks.
Top NBFIs:
- IDLC Finance Limited
- LankaBangla Finance
- Delta Brac Housing (DBH)
- IPDC Finance
Benefits:
- Faster loan processing
- Freelancer or self-employed professionals’ loan facilities
- House extension, renovation, or apartment completion special facilities
For individuals who do not meet normal bank requirements, NBFIs offer a convenient alternative.
3. Islamic Home Financing Solutions
Those who are searching for Shariah-compliant home financing solutions in Bangladesh have several banks and NBFIs that offer Islamic home loan facilities such as Ijara, Murabaha, or Musharaka.
Islamic Banks Offering Home Financing:
- Islami Bank Bangladesh Ltd
- Al-Arafah Islami Bank
- EXIM Bank
Instead of paying interest (which is prohibited in Islamic law), the above banks base their home financing on profit-sharing or lease facilities.
Advantages:
- Interest-free and Shariah-compliant
- Transparency and morality-based financing facilities
- Religiously compliant with the buyer with religious beliefs
4. Government Home Loan Schemes
The Government of Bangladesh initiated a number of subsidized loan schemes to deliver low-cost housing for middle- and low-income families, particularly government employees and civil servants.
Key Initiatives:
Housing Loan for Government Employees: Offers subsidised loans at lower interest rates and longer repayment periods.
Palli Karma-Sahayak Foundation (PKSF): Provides rural housing finance by microfinance institutions.
These programs aim to bridge the affordability gap, especially in rural and semi-urban regions, and improve home financing in Bangladesh to be more inclusive.
5. Real Estate Developer Installment Plans
Some real estate developers offer in-house installment plans or team up with financial institutions to assist buyers.
Characteristics:
- Low down payment of 20%-30%
- Monthly or quarterly installment facility
- Deferred payment arrangement till handover of the project
- Possible handover before final payment (subject to agreement)
While not exactly a “home loan,” these installment programs represent a form of home financing option that can be appropriate for buyers with restricted access to standard loans or those interested in under-construction units.
6. Foreign Remittance-Based Home Loans
Certain banks in Bangladesh offer home financing programs to Non-Resident Bangladeshis (NRBs) remitting money to Bangladesh. These programs allow NRBs to invest in real property for their relatives or as a future return.
Banks Offering NRB Home Loans:
- Bangladesh Bank (under central instructions)
- Commercial banks like UCB, NRB Bank, and Bank Asia
Pros:
- Local currency loans against foreign income
- Flexible documentation facility and conditions
- Can be used to buy flats, construct houses, or refinance existing mortgages
This is a good opportunity for the Bangladeshi diaspora to build or buy property in Bangladesh.
7. Cooperative Society Financing
A few of the Bangladesh housing cooperatives provide internal home loans in Bangladesh schemes for members. They usually have simple eligibility terms and minimal interest.
But this is a more community-based choice and may be short on the informality or legal structure of institutional lending. It’s only really an option if one already has registered cooperatives or employee-based societies.
Tips Before Applying for Home Financing in Bangladesh
1. Compare Interest Rates: A 1% difference can make a huge difference in your overall repayment.
2. Check Eligibility: Maintain a good credit history and a stable income source.
3. Understand All Costs: The processing charge, lawyer charge, and secret charges can leave a hole in your pocket.
4. Choose the Right Tenure: Longer tenure reduces EMI but increases overall interest paid.
Read the Fine Print: Ensure there are no adverse clauses like high pre-payment penalties.
With such a wide range of home loans offered in Bangladesh, potential homeowners have a variety of options when it comes to income, occupation, religion, and location. Whatever you may want for a home loan in Bangladesh, whether it is a conventional home loan in Bangladesh, an Islamic home loan, or government-backed loans, there is always something available in the market.
Before coming to your conclusion, it’s also wise to check your financial readiness, long-term goals, and repayment capability. Consultation with a good financial planner or mortgage counselor can also walk you through the ins and outs of home financing in Bangladesh and take you one step closer to your dream home.