Many people dream of buying a flat in Bangladesh. But the cost of flats is very high. People can own their dream homes with flat financing options. Banks and financial institutions offer loans to make this easier. Anyone can easily buy apartments with the help of these institutions. These loans come with different terms and benefits. In this blog post, we will discuss various types of flat financing options in Bangladesh.

Home loans are the most popular choice for flat buyers. Private banks and NBFIs often offer these loans. These loans can easily fulfill the dreams of buying properties. Some even have special schemes for low-income families. Government programs also support flat financing. The Bangladesh House Building Finance Corporation (BHBFC) provides affordable loans. These are great for middle-income buyers.

To get the best deal, compare loan options from different lenders. Assure Group can guide you through the process. Ready to own your flat? Call us now at +8809612-008800 to start your journey today!

Schedule a Meeting Now!

Types of flat financing options

In Bangladesh, you can find various ways to finance a flat. Each option has its own features, benefits, and requirements. You can choose according to your wish. Here are the main types of flat financing available in Bangladesh.

01

Home loans

It is the most common way. It helps people buy ready-made or under-construction flats. Home loan is the main source of finance. Banks like Dhaka Bank, Standard Chartered, and Bangladesh House Building Finance Corporation (BHBFC) offer these loans. NBFIs like IDLC Finance also provide home loans.

• Loan amount: Covers 60-80% of the flat’s value, depending on the lender.
• Interest rates: Range from 12.5% to 14%, based on your credit score and loan term.
• Repayment period: Can be 10-25 years, with flexible monthly payments.
• Tax benefits: You can get tax deductions on the interest and principal paid, as per Bangladesh’s tax laws.
• Age: You must be 21-65 years old at the time of loan maturity.
• Income: You need a steady income from a job or business.
• Credit score: A good credit history increases your chances of approval.
• Documents: You need ID (NID or passport), income proof (salary slips or tax returns), bank statements (6-12 months), and property documents (title deed or purchase agreement).

02

Mortgage loans

Mortgage loans are secured loans where the flat acts as collateral. If you fail to repay, the lender can take the property. These loans are flexible and can be used to buy a flat, expand a business, or consolidate debt. Here are some key features of a mortgage loan:

• Interest rates: Range from 8% to 14%, depending on the lender.
• Loan tenure: Up to 20 years, with monthly or quarterly payments.
• Collateral: The flat you buy or another property is used as security.
• Eligibility: Same as home loans
• Documents: You must provide clear property documents to prove ownership.
• Benefits: Lower interest rates compared to unsecured loans.

03

Government-subsidized loans

The government offers affordable loans through the BHBFC. These loans target low- and middle-income families. The Low-Income Community Housing Support Project (LICHSP) and housing microfinance schemes also help. Here are some key features:

• Interest rates: Lower than private banks, often 5-8%.
• Loan amount: Covers up to 70% of the flat’s cost.
• Repayment period: Up to 20 years, with affordable monthly payments.
• Target group: Focus on low- and middle-income households.
• Eligibility: Income must fall within the low- or middle-income bracket.
• Benefits: Affordable interest rates, long repayment terms.

04

Home improvement loans

These loans are for renovating or upgrading an existing flat. It helps improve living spaces or increase property value. Here are some features:

• Loan amount: Covers renovation costs, usually up to 50% of the flat’s value.
• Interest rates: 10-14%, depending on the lender.
• Repayment period: Shorter terms, typically 5-10 years.
• Eligibility: You must own the flat or have permission from the owner.
• Benefits: Enhances the flat’s comfort and value.

05

Joint Venture Financing

In joint ventures, landowners and developers share costs and profits. The landowner provides the land, and the developer builds the flats. This is common for large projects in Dhaka. Here are the main features:

• Cost sharing: The developer funds construction, while the landowner provides the land.
• Profit sharing: Both parties split the profits or flats based on an agreement.
• No upfront cost: Landowners don’t need to pay for construction.
• Eligibility: Landowners must have clear ownership documents.
• Benefits: Landowners can develop flats without personal funds.

Government initiatives to support flat financing

The Government of Bangladesh is taking significant steps to make flat financing more accessible and affordable for its citizens. They are working to make housing affordable. Here are some efforts:

• Ashrayan project: This project builds low-cost homes for poor families. It reduces the need for loans.
• Interest rate caps: Bangladesh Bank set a 9% cap on bank home loans. NBFIs have an 11% cap. This keeps rates affordable.
• Subsidies for government employees: Government workers get lower rates (4%) on construction loans.
• RAJUK approvals: The government ensures flats meet safety standards. This protects buyers and lenders.