How to take Tk 40m loan to buy flat or plot

For most people, owning a house or flat is a big dream in life. Fulfilling this dream is often seen as a way to secure the future.

However, many people invest their lifetime savings in building or purchasing a home and additional borrowing is usually required.

In this regard, banks and financial institutions provide support.

Under the new regulations of Bangladesh Bank, many banks are now able to offer housing loans of up to Tk 40 million (4 crore).

According to Bangladesh Bank regulations, the loan-to-equity ratio for the housing sector is 70:30. This means that for a flat costing Tk 10 million, the bank can provide up to Tk 7 million as a loan, and the remaining Tk 3 million must come from the customer. However, financial institutions can choose to provide the full amount as a loan if they wish.

To be eligible for a housing loan, the borrower must be at least 22 years old, and their age at the end of the loan term must not exceed 65 years.

Salaried individuals must have a minimum monthly income of Tk 25,000. Business owners and property owners are also eligible to apply for a housing loan.

Several documents are required to obtain a housing loan. These include:

1. Attested photocopy of the registered agreement for the purchase of a flat or land.

2. Attested copies of approved building plans and approval certificates.

3. Original copy of the registered booking agreement and allotment letter for purchasing a flat.

4. Approved house plan, original deed, registered khatian (land record), and certified copy of the tax receipt

5. Certified copies of CS, SA, RS, and BS khatians

6. 12-year search and no-encumbrance certificate (NEC)

7. For government-allocated land, the original allotment letter and possession transfer document

In a mortgage loan, permanent assets must be provided as collateral. Usually, the land deed is kept as security. The loan term can range from 5 to 20 years or more.

To obtain a mortgage loan, documents such as a tax certificate, utility bills (gas and electricity), bank statements, National ID (NID), guarantor’s documents, and salary certificate are required.

According to Bangladesh Bank’s new rules, banks can provide housing loans up to Tk 40 million to borrowers whose default rate is below 5 per cent. For those with a default rate between 5 per cent and 10 per cent, banks can offer up to Tk 30 million.

If the default rate exceeds 10 per cent, banks can provide a loan of up to Tk 20 million for purchasing a flat or plot.

Currently, banks themselves are announcing how much housing loan they can provide, and several banks have already started promotional campaigns in this regard.

One of the leading banks providing loans in the housing sector is City Bank. Arup Haider, Deputy Managing Director of City Bank, said, “This decision by Bangladesh Bank will boost the housing sector. Customers will now be able to take loans from banks at relatively lower interest rates.”