Bangladesh House Building Finance Corporation (BHBFC) has proposed the government to double its housing loan ceiling to Tk 20 million from existing Tk 10 million as the construction cost surged in the recent years.
BHBFC placed the proposal to the finance ministry recently, officials said.
BHBFC earlier in 2017 raised the ceiling from Tk 5.0 million to Tk 10 million for the borrowers of Dhaka and Chattogram cities.
Financial Institutions Division (FID) sources said the proposal is likely to be approved at a meeting of the FID and the new ceiling would take effect in July or august this year, he added.
Flat purchase loan for Dhaka and Chattogram areas would be increased to Tk 10.2 million from the existing Tk 8.0 million.
The rate of interest on housing loan is 9.0 per cent for Dhaka and Chittagong metropolitan areas while 8.5 per cent for divisional, district, peri-urban and growth centre areas, according to the BHBFC.
On the other hand, the rate of interest on flat purchase loan is 9.0 per cent for all metropolitan, divisional and district areas of Dhaka and Chattogram.
Earlier, the interest rate on flat purchase loan was 10 per cent for all the metropolitan, divisional, and district areas of Dhaka and Chattogram.
For the current fiscal year, the corporation set the loan disbursement target at Tk 6.0 billion, up by Tk 2.0 billion from that the previous fiscal year.
A BHBFC source said, "Currently, we sanction Tk 10 million loans for construction of 7,900/8,000 sq feet houses. But 14,000 sq feet or above houses are now being built in Dhaka and Chattogram areas. For this, it is not possible to meet the construction cost of multi-storied building through the existing loan amount."
On the other hand, prices of per sq feet of flats have increased in Dhaka and Chattogram. Besides, prices of flats are more than divisional/district ones, he said, adding that the existing loan ceiling for Dhaka and Chattogram to construct houses or purchase flats should be increased considering the present context.
"The division concerned of the Ministry of Finance (MoF) is working on the BHBFC proposal," a deputy secretary of the FID told the FE.