Good news for aspiring first-time home owners; Limit increased to 70% for residential home loan

Nepal Rastra Bank (NRB) has published a new circular recently which has brought some good news for the aspiring first-time home-owners.

According to the circulars, individuals who are taking a residential home loan for buying/making house for the first time can get up to 70% loan to value ratio. The upper limit for such loan has been stated at Rs 1.50 crore.

Some of the conditions stated by NRB for this are:

• The house or apartment must be used by the borrower and the land's size should be 3,000 square feet at most.
• The borrower shouldn't have a similar loan with other banks and financial institutions.
• Similarly, the rent to be earned from the home can't be used as a source of income for taking the loan.
• In case of an increase in the interest rate on loan, the loan collection should be managed without changing the pre-determined monthly installments.

Prior to this circular, the limit had been set at 50% inside Kathmandu and 60% outside the Capital city.