How the SBP policy rate and housing finance affect property buyers in Pakistan

Update, 26 October 2026: SBP raised the policy rate by 50 basis points to 12 percent on 26 October 2026, effective 27 October. Figures below that give 11.5 percent describe the position as of 14 September 2026. See SBP raises the policy rate by 50 basis points to 12 percent, effective 27 October.

As read on 14 October 2026. This is an explainer, not a rate forecast or advice.

The State Bank of Pakistan (SBP) kept its policy rate at 11.5% on 14 September 2026. For people who borrow to buy property, the rate shapes the cost of credit, but only part of the story. This piece sets out what SBP decided, how a policy rate reaches a borrower, and what the press reports about the affordable housing finance scheme.

What SBP decided

SBP’s Monetary Policy Statement of 14 September 2026 says the Monetary Policy Committee (MPC) decided to keep the policy rate unchanged at 11.5%, “with the majority decision of seven out of ten members”. It says headline inflation rose to 11.1% year on year in August from 9.2% in July, and that the stance remains appropriate to guide inflation to its 5 to 7% medium-term target. The Pakistan Bureau of Statistics (PBS) reports the same 11.1% for August in its monthly review, and The Nation reported the decision on 15 September.

SBP’s August 2026 Monetary Policy Report says the MPC raised the policy rate by 100 basis points this year to contain second-round effects of an energy price shock after the Middle East conflict began. We did not find the date of the next MPC meeting.

How the rate reaches a borrower

The policy rate is SBP’s main tool for guiding inflation. It does not set what a bank charges on a home loan. Banks set their own loan terms, and neither SBP’s statement nor its report gives an average mortgage rate.

SBP’s report refers to the “lagged transmission of earlier monetary easing”, which tells us a change in the rate takes time to show up in credit. The same report, discussing FY26 credit, says that within consumer finance demand remained strong for auto, housing and personal loans. Whether your own loan moves with the policy rate depends on whether it is fixed or floating and on the benchmark the bank uses. The bank’s offer letter is the place to find out.

The subsidised scheme

Separate from market pricing, a markup subsidy and risk-sharing scheme for affordable housing finance exists. The terms below are as reported by The News and Profit. We have not read SBP’s circular, so they are reported terms, not confirmed SBP terms.

The News reported on 18 March 2026 that SBP had revised the scheme’s features: a maximum loan of Rs10 million, for houses up to 10 marla and flats up to 1,500 square feet, with a flat 5.0% rate for end users, and loans already disbursed at 8.0% adjusted to 5.0%. Profit reported on 24 July 2026, citing an SBP official, the same Rs10 million limit and a fixed 5% rate under the Prime Minister’s Apna Ghar scheme.

Eligibility rules, tenor and processing steps beyond those above are unconfirmed here, so check them with a participating bank.

What borrowers should ask

• Is the rate fixed or floating, and for how long?
• If floating, what benchmark applies and how often does it reset?
• What are the tenor, the down payment, and all fees?
• Does the property fall within the scheme’s size limits as the bank applies them, and are you eligible?
• What would the monthly installment be at a higher rate than today’s?

Rates and scheme terms can change. This article makes no prediction about future rates and does not recommend any purchase or loan.