Lowest Rates for Home Loans by Sri Lankan Banks
Being able to own your dream home or an apartment for oneself is a dream come true, but paying for it upfront can be a challenge, especially, in a booming economy such as Sri Lanka where property value is on the rise. Due to this reason, most property buyers seek financial assistance through home loans. Over the past few years, the banking sector of Sri Lanka has witnessed unprecedented growth, especially, in the construction and mortgage sectors.
With the rapid shift of mid-income individuals to the high middle-class income, more home buyers tend to seek better quality living conditions. Rapid urbanization and easy access to technology makes purchasing apartments an appealing choice for many locals and expats. As a result, the year 2015 to early 2016, observed a major increase in the number of people taking mortgages for their property needs.
However, if youre a prospective home buyer, its important to have an understanding of the home loan situation in the country, in order to know where to find the best deals possible.
What is a home loan?
A home loan or a mortgage is a type of loan (monetary advance) offered to a buyer for buying a residential property. The homebuyer is responsible for paying the loan back to the financial institution on an installments basis. Typically, the property purchased using the loan is considered as collateral (security) in an event where the homebuyer is unable to pay the loan back.
Eligibility for Home Loans
Before applying for a housing loan in Sri Lanka, there are certain criteria every individual must meet. Even though each bank may have their own criteria, they generally circle around the following factors:
Who can apply?
Salaried employees or freelance individuals above the age of 18 with a minimum, regular monthly income of LKR 25,000 are eligible to apply for a housing loan in Sri Lanka. Note that the minimum monthly income may vary depending on the bank that is selected. For example,
- Commercial Bank = LKR 25,000
- Sampath Bank = Monthly income exceeding LKR 60,000
- Union Bank = Minimum monthly income should be LKR 30,000 per month.
What type of housing loans are available in Sri Lanka?
- Purchasing a house, apartment or land
- Building a house
- Completing a partially built house
- Paying off an existing home-related loan
What are the typical Interest rates offered for home loans in Sri Lanka?
Interest rates offered for such loans can be highly competitive and it could increase or decrease depending on the broader economic condition in the country. The rate can be as low as 5% to as high as 16% depending on the institute offering the loan and the type of loan. The payback period of the loan differs from bank to bank but can be from a few years to a few decades, subject to the amount borrowed. Home loan rates often indicate a fixed rate or a floating rate. While the fixed rate is fixed for the duration of the mortgage period, the floating rate tends to fluctuate depending on the market conditions.
Eligibility for obtaining home loans depends on factors such as buyers stable income, credit history, obligations, guarantors, assets, and citizenship. Some of the important documents required are:
- Salary slips for at least three months,
- Letter from employer confirming employment and income,
- Bank statements,
- Income tax returns,
- National Identity Card (NIC) or passport.
In the case of foreigners (non-citizens), obtaining a home loan in Sri Lanka may not be straightforward. However, it may still be possible for a foreigner to obtain a property by offering an advance payment for the seller.
⚠️ Below are interest rates from 2018. To get the latest Housing Loan Interest Rates, Please visit the Housing Loan Comparison page from here
Lowest Rates for Home Loans offered by Sri Lankan Banks – 2018
Bank |
Maximum amount |
Minimum Rate |
Maximum period |
| NTB | 50 Million | 25 years | |
| DFCC Vardhana Bank | Up to 80% of BOQ value for house construction on owned land. Up to 60% of the market (purchase) value for outright purchase Up to 70% of total cost for land purchase and construction of house | Fixed for 2 years 14% Fixed for 5 years 15% |
20 years |
| Union Bank | Maximum Loan amount will be based on your repayment capacity. | 20 years | |
| People’s Bank | No upper limit on Maximum Loan amount, up to 75% of – BOQ in constructing a house -Value in Purchasing of a land for residential purpose/purchasing of a house | 14.5% | 20 years |
| Commercial Bank | From LKR 500,000 to LKR 50 million | 14.5% | 20 years |
| HNB | 14.25% | 25 years | |
| Sampath Bank | Depends on the repayment capacity & the Forced Sale Value (FSV) of the property as stipulated by the Bank.
To purchase a house or to purchase a land and construct a house, you can borrow up to 70% of the total cost of the housing project. |
12.5% | 25 years or until the borrower reaches the age of 60 |
| BOC | BOC Sirimedura – Up to Rs. 25 million
Government housing loan – Up to LKR 8 million |
11% | 25 years |
| NSB | Up to LKR 2.5 Million | 13.50% | 30 years |
| Amana Bank | Minimum LKR 500,000/- or maximum up to 70% or Property Value | 15 years |
Bank |
Documents Needed |
| DFCC Vardhana Bank | Dully completed loan application
Salary slips and bank statements for 6 months Service letter and salary documents addressed to DFCC bank PLC Income tax certificate for the past 3 years Title deeds and approval survey plan Registered extracts for 30 years Sales agreements Non vesting/ownership/street line and building line certificate from local authority, etc. |
| Union Bank | Duly completed Union Bank Home Loan application form
Copy of National Identity Card,Copy of recent salary slips Letter from employer confirming, employment and income. |
| People’s Bank | Duly filled application for
Letter from employer confirming net salary (as per format available at branches) Guarantor statements (If based on guarantee)Salary particulars (including guarantors) Income tax particulars of last 03 years Last 06 months bank statements Identity card or passport copies of applicant and guarantors Details of bank accounts and facilities obtained Business registration certificate Last 03 years financial statements Details of last 06 months sales and purchases |
| Commercial Bank | For condominium loans – provide the Sales and Purchase Agreement along with your personal and income-related information to apply for the loan. |
| Sampath Bank | Confirmation letter covering designation, salary, allowances, period of service
Undertaking from the employee, to remit the salary to Sampath Bank account of the customer Salary slips for last six months Income tax particulars & Financial statements for the past 3 years Copies of the title deeds Survey plan referred to in the Deed which is duly approved by the Local Authority. If this is more than 10 years old, a new survey plan, duly connected to the former plan, is required ( If approval is not required, a letter issued by the Local Authority to this effect) Certified original extracts of the property for last 30 years (to be obtained not less than one month from the date of application ) |
| Amana Bank | National Identity Card/Passport/Driving License
Income proof documents Copies of Deeds and Survey plans of the Property Certified Extracts from the Relevant Land Registry Local Authority documents applicable for the Property |
| NSB | Local authority documents.
Extracts from the land registry Approval of survey plan. Title report |
| BOC | Evidence of income salary
Title deed and certified extracts Survey Plan Title Report Local authority documents |
Posted Date: 23rd January 2018
