The 80% first-home loan in Nepal: four conditions decide whether you actually get it

A cousin of mine spent last Asar getting quotes on a Rs 1.2 crore flat in Imadol. Two banks, two answers. One said bring 36 lakh, the other said bring 24 lakh. Same flat, same salary, same month.

The difference was twelve lakh rupees and a single question neither loan officer led with: had he ever taken a home loan before?

What the rule actually says

The change came from Monetary Policy 2082/83, point 74: "The credit limit for the construction/purchase of private residential housing will be increased from Rs.20 million to Rs.30 million. Provisions will be introduced such that a loan-to-value (LTV) ratio will be up to 80 percent for the first home construction/purchase and of up to 70 percent in other cases."

NRB turned that into an enforceable rule through circular 15/081/82, dated 2082/03/32, effective 1 Shrawan 2082 (17 July 2025). The before-and-after table in that circular is the clearest statement of what moved:

Worth noting what the headlines got wrong at the time. A first-home category already existed: the Unified Directive 2078 carried it at 70% with a Rs 1.5 crore ceiling, and Monetary Policy 2080/81 raised that ceiling to Rs 2 crore in July 2023. July 2025 widened an existing concession; it did not invent one.

The operative text now sits in the Unified Directive 2082, directive 3/082, point 11, consolidated on 16 January 2026. Two details in that text matter and rarely make the news. The 70% applies to a personal residential home loan of जतिसुकै रकमका, whatever amount, so it is not capped by loan size. And the ratio is defined against the fair market value of the pledged collateral, not the price on your sale deed.

The four conditions

This is the part that decides your answer, and every one of them is in the directive:

1. Maximum 3,000 sq ft, house or apartment, and for the borrower's own use only.
2. No prior house or apartment loan from any bank or financial institution. The bank has to verify it.
3. Rental income cannot be counted as a source of income when sizing the loan.
4. If interest rates rise, the EMI cannot rise. The tenure extends instead.

Read condition 2 carefully. It tests whether you have ever taken a housing loan, not whether you own a house. A person who inherited property, or bought a plot with cash, has taken no home loan and clears that clause. A person who took a Rs 15 lakh top-up on a flat in 2019 and repaid it fully does not.

In practice the verification is a CIB check, which only surfaces prior borrowing. That is the honest shape of the gate, and it means the rule screens out repeat borrowers rather than existing property owners.

One more clause, one sub-point down, catches families: a personal residential home loan may be given एउटा बैंक/वित्तीय संस्थाबाट एउटा परिवारलाई एउटासम्म मात्र, only one per family per institution.

Condition 4 is quietly the most valuable of the four and nobody markets it. Almost every Nepali home loan is floating, so your rate resets with the bank's base rate. For a first-home borrower, a rate rise legally cannot show up as a bigger monthly bill. That protection does not exist on an ordinary 70% loan, which is worth weighing in the floating versus fixed decision.

What the extra 10% is worth in rupees

Take a Rs 1.2 crore flat, valued by the bank at the same figure.

EMI figures are my own calculation using the standard amortisation formula covered in the home loan EMI post, at a flat 7.5% held constant for 20 years. Real floating rates reset monthly.

Twelve lakh less cash today. Eleven lakh twenty thousand more interest over twenty years. The 80% rule does not make a house cheaper, it moves the cost from the down payment to the interest column, and adds a little on top for the privilege.

That trade is still worth taking if the alternative is not buying for another four years. It is a bad trade if you had the 36 lakh anyway, which is the case prepayment math settles: money not put into the down payment earns nothing near 7.5% anywhere safe in Nepal right now.

Scale the same rule to its ceiling and it stops describing anyone I know. A Rs 3 crore loan at 80% implies a Rs 3.75 crore property, an EMI near Rs 2,41,700, and the income test below then demands about Rs 3,45,000 a month in gross salary. The top of this rule is not built for a salaried buyer.

The second gate, which binds harder

Unified Directive 2/082, point 49 caps the debt service to gross income ratio at 70% for loans taken to buy or build a house or land, and at 50% for other personal instalment loans and personal overdrafts. It is computed on gross annual income, verified against tax documents, and re-checked over the life of the loan. Exceeding it does not void the loan; it forces the bank to classify the loan as Watch List, which costs the bank provisioning. That is the real deterrent.

Run the Rs 96 lakh loan through it:

Only five of nineteen commercial banks publish an income ratio at all. Nabil states 60% of gross income after deducting other loan obligations; Nepal SBI, Machhapuchchhre and Global IME state 70%; Everest states 70% of disposable income, which is a materially tighter test because it strips existing obligations first. The other fourteen publish nothing, which means you find out your number only after applying. Our older post on how much home loan your salary supports frames this as a 50% cap; the directive text puts the housing ceiling at 70% of gross, and the 50% applies to non-housing personal credit.

Rental income being barred under condition 3 bites here. A buyer planning to rent the ground floor to service the EMI cannot use that projection to qualify for the 80%.

Which banks actually offer 80%

Eighty percent is a ceiling NRB permits. It is not a product every bank has built.

Rates are also at multi-year lows, which is the second half of the story. NRB's eleven-month macroeconomic report puts the commercial banks' average base rate at 4.88% at mid-June 2026, down from 6.09% a year earlier, and the weighted average lending rate at 6.64%, down from 7.99%. Bank rate sheets for Shrawan 2083 show base rates of 5.01% at NMB, 5.02% at Siddhartha, 5.21% at Nepal SBI and 5.31% at Himalayan, with home loan premiums running roughly 0.5 to 3.0 percentage points on top.

That spread is not decoration. On the same Rs 96 lakh loan over 20 years:

My calculation, same formula and assumptions as above.

Rs 13,175 a month separates the best tier from the worst, on identical paperwork. Over the full tenure that is more than Rs 31 lakh. Which premium band a bank puts you in deserves more of your negotiating energy than the LTV does.

What the 80% does not cover

The LTV covers the property. It covers none of the transaction costs, and those are cash.

Registration rates are from the Bagmati Province Finance Act 2083, Schedule 1, effective 1 Shrawan 2083. Note that mortgage registration to a licensed bank is a flat slab, not a percentage. Person-to-person mortgage deeds pay 1% of value instead, which is why a Rs 60 lakh bank loan costs Rs 12,500 to register while the same amount borrowed privately costs Rs 60,000.

Two concessions are worth checking before the deed is drawn. A woman buying inside a Valley metropolitan city or municipality gets 25% off the registration fee; a single woman gets 35%. Only one concession applies per deed. On a Rs 1.2 crore flat in KMC that 25% is about Rs 1,59,000.

Prepayment is the one place NRB is generous. Under directive 20/082, there is no prepayment fee at all on any loan up to Rs 50 lakh, and above that the fee is capped at 0.75%, 0.375% and 0.15% of the amount prepaid at under two years, two to five years, and over five years. Above Rs 50 lakh there is still no fee if you are prepaying because the bank changed your rate.

And the 80% is measured against a valuation you do not control. NRB disciplines valuers who overstate: if a collateral auction revalues at less than two-thirds of the original assessment, the valuer can be blacklisted. Nepali bank valuations run conservative for a structural reason, which is why the bank's number comes in under the price you agreed. Do not budget on the assumption that valuation equals price.

A year on, did it move anything?

The rule is now a year old, so there is data rather than speculation.

Residential personal home loans outstanding across all banks and financial institutions rose to about Rs 464.6 billion at mid-June 2026, up 11.3% in eleven months, while total credit grew 5.8% and real estate loans actually shrank 1.3%. Home lending was genuinely the fastest-growing slice of the book.

The book itself barely grew. Private sector credit expanded 6.2% against a 12% target, with Rs 1.56 trillion of excess liquidity parked in the banking system as of 10 July 2026, and NRB's own calculation showing that capital and liquidity constraints leave banks able to actually lend only about Rs 600 billion of it. NRB's July 2026 macroeconomic report is blunt about why: "Despite abundant liquidity, banks' credit expansion has been constrained by private sector resistance, stricter credit prudence, and declining asset quality."

The same report uses a phrase a central bank does not use casually. Describing collateral-based lending linked to loan-to-value ratios, it writes that property prices "rose sharply, triggering an asset price bubble and price corrections are a natural economic phenomenon." Gross non-performing loans stood at 5.6% in April 2026, and watchlist loans climbed from 6.7% in mid-July 2023 to 11.1% by mid-April 2026.

Two other things landed on the same 1 Shrawan 2083 date and change the arithmetic of buying. Capital gains tax on property rose: 5% to 7.5% for holdings of five years or more, 7.5% to 10% below that. And government minimum land valuations across the Valley rose by up to 10%, with the top Kathmandu belt around Ratnapark and Darbar Marg reset to roughly Rs 76 lakh per aana. The rush to register before the tax change pushed Asar 2083 real estate revenue to Rs 11.95 billion, nearly double the next-highest month of the year at Rs 6.26 billion. That is a deadline stampede, not a housing recovery.

One last thing to know before treating official statistics as a report card on this policy: NRB's published home loan series still uses the old Rs 2 crore cut-off, a year after the ceiling moved to Rs 3 crore. The data structurally cannot show the effect at the top end.

What you actually need to know

The 80% is a ceiling on the bank's valuation, not on your purchase price, and it is gated by four conditions. The binding one for most people is having never taken a housing loan from any bank before. Ownership does not disqualify you; a prior loan does.

The income test usually decides your loan size before the LTV does. NRB permits 70% of gross for housing debt, and several banks are tighter. Work out your ceiling from your gross salary first, then see which property that number reaches, rather than the other way round.

The premium band is worth more than the extra 10% of LTV. A 5.7% loan and an 8.0% loan on the same Rs 96 lakh differ by more than Rs 31 lakh across twenty years. Get competing quotes in writing before you accept a rate, and remember there is no prepayment fee at all under Rs 50 lakh.

If you have been through a first-home application recently and your bank read any of these conditions differently, I would like to hear about it: parjanya57@gmail.com.

This post is part of the Nepal Money Basics guide — the big-ticket decisions section, alongside what an apartment in Kathmandu really costs and whether a plot can be financed at all.