Home loans and home mortgages are not a common phenomenon in the Pakistan. Quite contrary to the West, where 99% of the people cannot even imagine to own a house without taking a home loan from the bank or from the brokers; Pakistanis tend to save the money (often throughout their working lives) and then build a house in their 50s. That is why Pakistani banks and saving schemes have lot of cash at any given time, and that is why even during the worst depression and financial recession like 2008, Pakistani banks remained sound and safe and they didn’t even had a blip to worry about. Pakistan is a cash based society. Pakistani pay cash and buy things including the homes and cars. That’s it.
In a typical Western way of life, over a period of many years (normally 20 to 30 years), the borrower repays the loan, plus interest, until he/she eventually owns the property free and clear. In those decades of paying back the loans, if you fail to repay, you accumulate massive interest. And if you loose your income and cannot repay the home loan, well your house is then snatched from you from the bank and you come to the road with your family. Housing bubbles in America, Ireland and in many other countries in the world saw scores of families, hundreds of thousands of people losing their homes to the banks. Some people think that in Pakistan, home loans are not popular because of the interest which is a sin in Islam. That may be one reason, but the primary reason is culture.
People like to spend their lives in rented accommodations, saving the money, and then building homes at the end. They avoid banks and the loans and don’t consider it a positive thing and noble thing. Business loans are more common though, but only for the select few. I have lived in the West and have seen the pressure, depression, frustration and burden of mortgages. Some argue that paying rent is wastage of money, but if you lose your job and can’t pay the rent, you can always downsize. But with a mortgaged house your are stuck. Besides you pay huge amount of interest. The value of home increases but so is the interest. I think Pakistani way of life avoiding mortgage is better than the mortgage system of the West.