Buying Property in Bangladesh? Key Costs to Consider in 2025

Determining how much money you need to buy a house has always been daunting for first-time homebuyers in Bangladesh, and it doesn’t seem to be getting much easier in 2025. Interest rates on home loans are still hovering around 11 to 13 percent — even after Bangladesh Bank eased monetary policy multiple times in 2024 — and property prices in urban areas like Dhaka and Chattogram remain high.

But despite those challenges, buying a home is still a smart move that can help you lay a strong financial foundation for your future. Here’s a rundown of six key costs to calculate as you figure out exactly how much home loan you can afford.

Down Payment

How much money do you need to buy a home? The amount needed will vary based on each buyer’s unique circumstances, but a good starting point for your financial calculations is the down payment. This is the amount of money you contribute to the home purchase upfront. By increasing the size of your down payment, you lower the amount of money you need to borrow, which, in turn, lowers your monthly payments over the course of the home loan. Banks and financial institutions prefer larger down payments because they indicate a lower level of risk.

Tips to Build Your Down Payment Fund

Whether you put down 20 percent or 10 percent, coming up with that big upfront cost requires some work. Helpful tips to consider for saving your down payment:

• Look for local support: Explore first-time homebuyer programs offered by Bangladesh House Building Finance Corporation (BHBFC) or private banks. You may qualify for subsidized home loan packages or special schemes.
• Identify every expense you can cut: Saving more starts with spending less. Can you reduce mobile data usage? Are you overspending on dining out or online shopping? Audit your weekly and monthly expenses to find ways to trim your spending.
• Put your savings to work: Instead of keeping your money in a basic savings account, consider fixed deposits or DPS (Deposit Pension Schemes) with competitive interest rates. Just ensure you’ll have access to the funds when needed.
• Ask for help: If you have a relative or close friend who is willing to gift you money, that can be used for the down payment. Be prepared to document the gift for your home loan provider to confirm it’s not a loan.

Closing Costs

The down payment isn’t the only upfront expense you need to consider. You can expect to pay 2 to 5 percent of the property value in closing costs. These vary widely depending on the location and real estate market. For example, registration fees in Dhaka can be significantly higher than in smaller cities like Rajshahi or Barisal.

Closing costs include a range of fees charged by your home loan provider and other parties involved in finalizing the sale. These can include:

• Property registration fees
• Stamp duty
• Legal fees
• Loan processing charges
• Valuation fees
• Mutation charges

Shop around and compare these fees across banks and legal professionals. If you hire a real estate agent or lawyer, their fees will also be due at closing.

Prepaid Costs

Beyond the standard closing costs, certain recurring fees may also require upfront payment. These are known as prepaid and can include advance payments for property taxes and homeowner’s insurance. Your home loan provider may hold these funds in escrow until the bills come due. You’ll also prepay interest for the remaining days of the month. For example, if you close on April 20, you’ll prepay interest through April 30.

Earnest Money

Prospective buyers also pay an earnest money deposit to show serious intent to buy a home. You’ll typically need to pay 1 percent of the property value. However, earnest money is not an additional expense — it’s simply paying a portion of your expenses upfront. You make the deposit within a day or two after your offer is accepted, and at closing, it’s credited toward your payment.

Cash Reserves

Your home loan provider will want to see that you have enough remaining financial reserves to cover your mortgage payments in case of an emergency or income disruption. Mortgage reserves are typically measured in months. For example, if you have ৳300,000 in savings after closing, and your monthly payment is ৳50,000, you have six months of reserves. Non-liquid assets like retirement funds or land holdings generally don’t qualify.

Moving Costs

In addition to buying a home, you need to budget for the costs of moving into it. Prices vary based on the size of your home, the distance you’re moving, and whether you’ll need temporary storage. A typical move in Bangladesh might cost between ৳20,000 and ৳60,000, depending on location and services used.

Factor in small expenses that add up, such as boxes, packing tape, and labor charges. Also consider the cost of updating your address on NID, bank accounts, and utility bills. If you’re moving to a different city, transport costs — whether by truck, train, or bus — can add up quickly.

Next Steps

When shopping to buy a home, it’s invaluable to work with a local real estate agent who knows your market well. Interview several professionals and ask family and friends for referrals before choosing the one who’s right for you.

It’s also smart to compare rate offers from at least three different banks or financial institutions before moving forward. Securing a lower interest rate upfront can save you lakhs over the life of the home loan.

Finally, make sure to account for both upfront and ongoing expenses when creating a budget, and take a close look at your monthly finances to ensure that carrying a home loan and paying for continuing costs won’t become a long-term burden.