What is the current SBP policy rate in Pakistan 2026?

The State Bank of Pakistan (SBP) policy rate in 2026 is 12% (as of May 2026), down from a peak of 22% in 2023. SBP has been cutting rates as inflation has declined from its 2023 peak. Bank lending rates for home loans are typically KIBOR + 1-3%, which currently translates to approximately 13-16% per annum for conventional loans.

What is KIBOR and how does it affect my loan rate?

KIBOR (Karachi Interbank Offered Rate) is the benchmark lending rate between Pakistani banks. Most commercial loans in Pakistan are priced as KIBOR plus a spread (e.g., KIBOR + 2%). As SBP cuts the policy rate, KIBOR falls, and your floating-rate loan EMI decreases. Check sbp.org.pk for the current KIBOR rate.

How is EMI calculated in Pakistan?

EMI (Equated Monthly Installment) formula: EMI = P × r × (1+r)^n / ((1+r)^n - 1), where P = principal loan amount, r = monthly interest rate (annual rate ÷ 12), n = loan tenure in months. For a PKR 5 million home loan at 15% per annum for 20 years: r = 1.25%, n = 240 months → EMI ≈ PKR 65,818/month.

What is the difference between conventional and Islamic (Murabaha) loan?

Conventional loans charge interest (riba) which is prohibited in Islam. Islamic Murabaha is a cost-plus-profit structure: the bank buys the asset and sells it to you at a fixed profit margin. The monthly payment amount is similar, but the legal structure is different. Diminishing Musharakah (used for home finance) means you gradually buy the bank's share in the property. Islamic banks in Pakistan offer these under Shariah supervision.

Pakistan Loan EMI Calculator 2026 — Home, Car, Personal (Conventional & Islamic)

Calculate your monthly installment for any type of loan or Islamic financing. Includes a 12-month amortization schedule and lump-sum prepayment simulation.

Loan Purpose

Principal Amount (PKR)

Down Payment (%)

Interest Rate (%)

Tenure (Years)

Disclaimer: This calculator provides estimates for informational purposes only. Actual loan terms, interest/profit rates, and processing fees vary by institution. For Islamic financing, consult your bank's Shariah board for product-specific terms. HisaabKar.pk is not a licensed financial advisor and does not provide lending services.

Frequently Asked Questions

What is the SBP policy rate in 2026?

12% as of May 2026, reduced from a peak of 22% in 2023. Bank home loan rates are typically KIBOR + 1–3%, translating to roughly 13–16% per annum.

How is EMI calculated?

EMI = P × r × (1+r)^n / ((1+r)^n − 1). For a PKR 5M home loan at 15% for 20 years: EMI ≈ PKR 65,818/month, total payment ≈ PKR 15.8M including interest.

What is Islamic Murabaha financing?

Murabaha is a cost-plus-profit structure where the bank buys the asset and sells it to you at a disclosed markup. Monthly payments are similar to conventional EMI but the structure avoids interest (riba). Used by all Islamic banks in Pakistan (Meezan, Dubai Islamic, Bank Islami, etc.).

Can overseas Pakistanis get a home loan in Pakistan?

Yes — SBP's Roshan Apna Ghar scheme offers home financing in PKR and USD for NRPs. Repayments from your Roshan Digital Account. Available through HBL, MCB, UBL, ABL, and Meezan Bank.