Every home loan decision in Nepal comes down to four questions the credit officer must answer. Can you afford the EMI? Is the property worth enough? Will the loan be repaid before you retire? And is the paperwork clean? Fail any one and the file stops. Here is what each gate looks like from the bank's side.
Gate 1: income and the 50% rule
Banks look at net monthly income, after tax and provident fund, and cap your total EMIs at roughly 50% of it. This debt-to-income (DTI) ceiling follows NRB guidance and is applied to all your loans together, including a two-wheeler loan, a credit card minimum payment or an existing personal loan.
Say you earn Rs 80,000 net and already pay a Rs 8,000 bike EMI. Your room for a new EMI is Rs 40,000 minus Rs 8,000, or Rs 32,000. At 9% over 20 years, one lakh of loan costs about Rs 900 a month, so Rs 32,000 supports a loan of roughly Rs 35.5 lakh. Clear the bike loan first and the same income supports about Rs 44 lakh.
What counts as income:
- Salaried: basic plus fixed allowances shown on the salary certificate. Bonuses and overtime are usually counted at 50% or not at all.
- Self-employed: net profit from audited accounts for the last two or three years, often averaged.
- Rental income: typically counted at 60 to 70% of the lease value, with a registered rental agreement.
- Remittance: counted only if it flows through a Nepali bank account regularly, usually with 12 months of statements.
- Spouse's income: counted in full if the spouse is a co-applicant.
Gate 2: valuation and the 70% LTV
NRB limits the loan-to-value ratio on a residential home loan to 70% of the property's value. That means you need at least 30% as your own contribution. For plain land without a house, the LTV is lower, so a loan to buy a plot and build later is treated differently from a loan to buy a finished house.
The catch is the word "value". The bank sends a panel valuer who produces two numbers: fair market value and distress value. The bank usually lends against the lower one or a weighted average of both, and distress value is often 20 to 30% below what the seller is asking. So a house priced at Rs 1 crore might be valued at Rs 85 lakh, and 70% of that is Rs 59.5 lakh, not Rs 70 lakh.
NRB also caps the size of a first residential home loan, currently Rs 2 crore. Check the latest directive, as this limit has moved several times.
Gate 3: age at maturity
Banks want the loan repaid before your income stops. The usual rule is that the tenure must end by age 60 to 65 for salaried borrowers and up to 65 to 70 for self-employed. A 45-year-old government employee retiring at 58 might be offered only 13 years, which raises the EMI and lowers the loan amount that Gate 1 allows. Adding a younger co-applicant, typically a spouse or child, is the standard fix.
Gate 4: the property itself
Before valuation, the bank's legal team checks the title. Expect to provide:
- Lalpurja (land ownership certificate) in the seller's name, with a rokka-free status check at the Land Revenue Office.
- Char killa pramanit, the ward office's certification of the four boundaries.
- Napi naksa (trace map from the survey office) showing motorable road access. Most banks require a road at least 8 to 13 feet wide; property without road access is often rejected outright.
- Naksa pass (approved building permit) and, for a finished house, the completion certificate from the municipality.
- Up-to-date malpot (land tax) and house tax receipts.
Property inside a municipality with a clear, registered road is easy to finance. Guthi land, land under a court dispute, or a house built without a permit is not.
Gate 5: your credit record
The bank pulls your CIB report from Karja Suchana Kendra. Any live blacklisting ends the application. Past defaults that were settled are usually acceptable with an explanation. See our CIB guide for how to check your own record before the bank does.
Putting it together
A worked example: a 35-year-old salaried couple with combined net income of Rs 1.5 lakh, no other loans, buying a Rs 90 lakh house valued at Rs 80 lakh.
- Income gate: Rs 75,000 EMI room supports about Rs 83 lakh at 9% over 20 years.
- LTV gate: 70% of Rs 80 lakh is Rs 56 lakh.
- Age gate: 25 years available, so 20 years is fine.
The loan is Rs 56 lakh; the binding constraint is valuation, not income. They need Rs 34 lakh of their own money plus around Rs 2 to 3 lakh for registration, valuation, insurance and processing.
Run your own numbers in the affordability calculator, then take the two-minute eligibility check to see which banks are likely to say yes.