Home loan basics

General information, not financial or legal advice. The limits below are from Nepal Rastra Bank's (NRB) Unified Directive 2082, as checked in October 2026. NRB changes its rules often and bank practice varies, so confirm current terms with your bank.

Many homes in Nepal are bought with help from a bank. Knowing the rules before you start looking saves disappointment when the valuation comes back.

Who lends

Commercial banks, development banks and finance companies licensed by Nepal Rastra Bank (NRB) offer home loans to buy a house or apartment, to build on your own land, or to buy land to build on. Loans run for many years; each bank sets its own maximum term based on your age and income.

How much you can borrow

Two limits apply, and the lower one wins.

The property's value (loan-to-value). A bank may lend up to 70% of the property's fair market value for a personal home loan. First-time buyers can get up to 80% on a home loan of up to Rs 3 crore, if:

• the house or flat is for your own use and no bigger than 3,000 sq ft;
• you have never had a home loan from any bank or financial institution;
• rent is not counted as your income;
• the bank keeps your monthly instalment the same if interest rates rise.

Loans to buy land count as real estate loans, limited to 50%. The value is the bank's own valuation, usually below the asking price, so your down payment is often more than the minimum.

Your income (debt-service-to-income). Your loan repayments may take up to 70% of your income for a loan to buy or build a house or buy land, and up to 50% for other personal instalment loans. Banks need documents for your income, and for taxable income they work from the income you have paid tax on. Existing loans count too, and banks can be stricter.

Interest rates

• Fixed by default. NRB requires banks to give personal term loans of more than a year, home loans included, a fixed rate for the whole term unless you ask for a floating rate. A fixed rate can be reviewed only with your written consent, first after 7 years and then every 5 years. Offers still differ between banks, so read the offer letter.
• Floating rates are the bank's base rate plus a premium. The premium written in your offer letter cannot be raised after the loan is approved, and the rate moves with the bank's average base rate. Banks publish base rates every month and fixed rates every six months.
• Compare the full rate and the premium between banks.
• The EMI calculator on any GharKhoj listing shows what a loan would cost each month.

Documents you'll need

• your citizenship certificate and photos, and a PAN for loans of Rs 25 lakh or more;
• income proof: a salary certificate and bank statements, or for a business, its registration, tax returns and audited accounts; remittance records if you earn abroad;
• for the property: the lalpurja, trace map, four-boundary letter and land tax receipt, and for a building in a municipality, the building permit, approved drawings and completion certificate, which the bank must check;
• to build a house, the estimate and BoQ. The bank usually pays out in stages as the work progresses, and lends only for buildings that follow the National Building Code.

Costs beyond the interest

NRB lets banks charge only three fees on a loan:

• a service fee of at most 0.75% at commercial banks, 1% at development banks and 1.25% at finance companies;
• a prepayment fee: none on loans of up to Rs 50 lakh; on bigger loans it is capped as a share of the service fee, falls over time, and is not charged if you prepay because the bank changed the terms (fixed-rate loans can carry a higher fee, so check);
• a commitment fee on any approved amount you don't use.

Charges paid to others, such as valuation and insurance, may not be marked up. Late payment can cost penal interest of at most 2 percentage points a year, on the overdue instalment only. You also pay the fee for registering the mortgage at the Land Revenue Office, and for property insurance from an insurer you choose.

While you repay

• The bank registers a mortgage (dhito) on the property at the Land Revenue Office and keeps the lalpurja.
• When the loan is fully repaid, ask the bank for the release letter, have the mortgage removed (dhito fukuwa) at the Land Revenue Office, and collect your lalpurja.
• If you are on a floating rate and rates rise, ask your bank about a longer term or part-prepayments before you miss an instalment.

If you have a complaint

Raise it first with the bank's grievance desk: every bank must have one and name a grievance officer. You can also use NRB's grievance portal, gunaso.nrb.org.np.

Next: Buying a house or apartment: what to check and How property transfer (registration) works.