Apna Ghar Just Raised the Cap to PKR 1 Crore — Here's What Actually Changed

On 27 February 2026 the Economic Coordination Committee did something Pakistan's mortgage market has been waiting nearly four years for: it tripled the cap on the country's flagship subsidised home loan and locked the mark-up at a uniform 5%. The scheme now goes by the name Mera Ghar Mera Aashiana (MGMA), but most participating banks still market it as the Wazir-e-Azam Apna Ghar Program — Ghar Ho Tu Apna. The PM's office calls it PM Apna Ghar (PM-APG). Same product, four names.

What the ECC actually approved on 27 Feb 2026

The Press Information Department's release (PR 280) is short and almost clinical. Loan cap up from PKR 3.5 million to PKR 10 million. End-user mark-up standardised at a uniform 5%, replacing the older tiered 5%/7%/9% structure. Eligible houses up to 10 marla and apartments up to 1,500 sq ft. Loans already disbursed under the old tiered rates being re-adjusted to the new 5%. Processing fees and prepayment penalties eliminated.

A second ECC meeting on 6 May 2026 then widened the framework further — formally including overseas Pakistanis via RDA + NICOP rails, opening the door to non-banking financial institutions, and adding a public-private partnership track. We have covered that in a separate piece. Most coverage conflates the two decisions; they are distinct.

At the 27 February meeting the implementation numbers were also published: 10,594 applications received by banks totalling PKR 32.288 billion, against 344 loans worth PKR 810 million actually disbursed. The throughput problem is real.

How the new MGMA differs from the old MPMG

This is where most coverage gets sloppy. The Mera Pakistan Mera Ghar (MPMG) scheme — the SBP's 2020-vintage product — was tiered: 5% for the first five years, 7% for the next five, and a step-up to market thereafter, with a smaller cap. MPMG was wound down. MGMA is not MPMG. The 27 February ECC release uses one phrase only: "uniform 5%." There is no published market-rate step-up for MGMA in the public record. Anyone telling you the new scheme is "5% for ten years then market" is reading off an old briefing.

That distinction matters. Under a uniform 5%, the entire amortisation schedule prices off the subsidy. There is no rate-shock clause in year 11. (Pre-publication caveat: the SBP IH&SMEFD implementing circular will be the final word on tenure structure. Bank product pages and the ECC release agree on the 5% headline; tenure varies a little bank-by-bank.)

The numbers, side by side

Note the tenure row. The ECC release did not put a tenure number in writing — the 20-year figure is what Bank Alfalah, Askari and ABL list on their respective product pages for the Wazir-e-Azam Apna Ghar product. Treat it as the participating-bank consensus rather than a scheme-level rule.

What it means for monthly payments

This is the part that re-prices the rent-vs-buy math for an entire income bracket.

Take a PKR 10 million loan, 20-year term, fully amortising. At MGMA's uniform 5%:

• Monthly payment ≈ PKR 65,996.
• Total paid over 20 years ≈ PKR 15.84m.
• Total interest paid ≈ PKR 5.84m.

Now run the same loan at a commercial-bank mortgage rate of ~14% (roughly KIBOR plus typical spread post the April SBP hike):

• Monthly payment ≈ PKR 124,353.
• Total paid over 20 years ≈ PKR 29.84m.
• Total interest paid ≈ PKR 19.84m.

The MGMA borrower saves roughly PKR 58,000 every month. Over the full 20-year tenure that is about PKR 14 million in interest avoided — more than the principal itself. The math here is unforgiving; a 900 bps spread on a 20-year amortising loan is a very large subsidy.

It also changes the affordability cut-off. At commercial rates, supporting a PKR 124,353 EMI under a conservative 40% debt-service-to-income ratio implies a household income of around PKR 310,000/month. At MGMA's 5%, the same property is reachable on roughly PKR 165,000/month. That is the difference between a senior salaried professional and a middle-management family.

The rent-vs-buy frame moves too. In the major metros, a rough yardstick for a 10-marla house or a 1,500 sq ft apartment that would price at PKR 11 million is roughly PKR 90,000-110,000/month in rent (Karachi DHA Phase 6 / Lahore DHA Phase 5 / Islamabad sectors E-11, F-11 areas — these are indicative bands, not quotes). Against an MGMA EMI of ~PKR 66,000, ownership becomes the cheaper monthly cash outflow at typical metro rents, before you count any equity build-up or property-price appreciation. Against a commercial-rate EMI of ~PKR 124,000, ownership is still the more expensive monthly line — which is exactly the gap the subsidy was designed to close.

A second sensitivity worth noting: a shorter tenure changes the picture sharply. The same PKR 10m loan at 5% over 15 years pencils out at roughly PKR 79,079/month; over 10 years, about PKR 106,066/month. Pulling tenure in from 20 to 15 years adds about PKR 13,000 to the monthly payment but reduces total interest paid by roughly PKR 1.6m. Borrowers picking between 15 and 20 years are trading interest savings against monthly cash-flow headroom — both directions are defensible.

Who's eligible

The scheme is built around the middle-income salaried buyer but it is not closed to anyone else. Per the ECC release and the participating-bank product pages:

• Roughly 10% down-payment from the borrower; bank finances the remaining 90%.
• Properties up to 10 marla (house) or 1,500 sq ft (apartment).
• Salaried and non-salaried (self-employed business) applicants are both eligible at participating banks. Non-salaried applicants typically face stricter documentation — audited statements, tax returns — but are not excluded.
• Applications routed through any of the 20+ participating institutions: HBL, ABL, Bank Alfalah, Askari, Meezan, MCB Islamic, NBP, Sindh Bank, Standard Chartered (Saadiq for Islamic), plus microfinance banks for the smaller-ticket end.

The 6 May 2026 ECC follow-up added overseas Pakistanis to the eligibility pool via NICOP + Roshan Digital Account — that is the subject of the companion article.

The catch — what could go wrong

Three things to keep an eye on.

One, the subsidy is paid by SBP through a mark-up subsidy mechanism, and the cost to the federal budget scales linearly with disbursements. The ECC discussed financing roughly 500,000 housing units over four years; an earlier subsidy budget item linked estimates to 50,000 units by 30 June 2026. If disbursements accelerate the way the cap raise is designed to encourage, the fiscal cost will need re-budgeting. Past Pakistani subsidy schemes have hit headline-rate cuts after the budget season.

Two, the 20-year tenure is not actually in the ECC press release. It is a number that comes from participating-bank product pages. If SBP's eventual implementing circular caps tenure at something shorter, the monthly-payment math above tightens.

Three, processing throughput. The ECC's own numbers say only 344 loans had been disbursed against 10,594 applications as of 27 February. That is a ~3% conversion rate. The cap raise will pull in more applications; without parallel reform of the bank-side credit assessment process, the same backlog problem will scale. Read coverage of monthly disbursement runs from June onwards as the leading indicator of whether the scheme is actually functional.

A fourth, smaller risk worth flagging: the retroactive re-adjustment of pre-existing tiered-rate loans to a uniform 5% is the right policy for borrowers, but it is a step-down in bank yield. Banks have to be made whole through the SBP mark-up subsidy claim. If subsidy disbursement to banks lags — as it has periodically under previous schemes — the participating-bank list could thin out faster than the marketing collateral suggests.

How to apply

The central digital channel is apnaghar.gov.pk, which routes applicants to a participating bank. Most participating banks also accept direct walk-in applications and have product-specific pages — Bank Alfalah's "Ghar Ho Tu Apna" page is the clearest of the lot, and Allied Bank has a near-identical disclosure. Expect to be asked for: CNIC, salary or income documents, property documentation, and a recent utility bill at the existing residence.

Processing time at participating banks has historically run four to eight weeks under the legacy scheme. The cap-raise circular has not yet visibly changed that benchmark.

Try the math yourself

If you want to see what a specific loan size, tenure or down-payment does to your monthly payment under MGMA — and compare it directly with a commercial mortgage — run the numbers in our calculator with the Apna Ghar preset already loaded.

Try the PMRY mortgage calculator with the Apna Ghar preset →

Sources

1. PID Press Release No. 280 — ECC approves revised low-cost housing scheme and key infrastructure grants (27 Feb 2026)
2. Dawn — Economic Coordination Committee cuts mortgage rate to 5pc
3. Business Recorder — Mera Ghar-Mera Ashiana: Housing scheme loan size enhanced up to Rs10m
4. Geo News — ECC extends loan limit to Rs10m for Mera Ghar Mera Aashiana applicants
5. Profit by Pakistan Today — Govt raises loan limit to Rs10 million for low-cost housing, cuts mark-up to 5%
6. Arab News — Pakistan approves expanded low-cost housing scheme, raises loan cap to Rs10 million
7. Bank Alfalah — Wazir-e-Azam Apna Ghar Program — Ghar Ho Tu Apna (product page)
8. Mettis Global — ECC raises housing loan limit to Rs10m at 5% markup