Most homebuyers in Dhaka start with a single number: the monthly instalment. It is the number the bank quotes, the number the household budget is built around, and the number that decides whether a flat feels affordable. It is also incomplete. Owning a flat carries a set of monthly costs that continue long after the loan is approved, and households that ignore them discover the gap at the worst moment — after they have moved in.
The full monthly picture has five parts: the loan instalment, the service charge, routine maintenance inside the flat, utilities, and a provision for larger future repairs — often called a sinking fund. Each behaves differently, and each deserves its own line in the budget.
The instalment: the largest line, and how it is calculated
The instalment on a home loan is calculated by a standard amortisation formula. If P is the loan amount, r is the monthly interest rate (the annual rate divided by 12), and n is the number of monthly payments, then:
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1)
The formula is worth knowing because it explains why instalments behave as they do. A higher rate raises the instalment even if the loan amount is unchanged. A longer tenure lowers the monthly payment but increases the total interest paid over the life of the loan. There is no version of the formula in which borrowing is free — only choices about how the cost is spread.
An illustrative example, not a bank offer, makes the point. Take a loan of Tk 70 lakh — the amount that would correspond to a Tk 1 crore flat if a bank lent the full 70 per cent generally permitted under Bangladesh Bank's housing finance framework, with the buyer providing the remaining 30 per cent. Over 20 years (240 payments) at an illustrative annual rate of 12 per cent, the monthly rate is 1 per cent, and the formula gives an instalment of roughly Tk 77,000 per month. Actual offers will differ by bank, rate, tenure and borrower profile, and this figure must not be read as a quoted rate or an available loan. Its purpose is only to show the scale: on a loan of this size, the instalment alone absorbs a large share of a salaried household's income.
Two cautions follow. First, if the loan rate is variable, the instalment can change when the rate resets — a household should test whether it could still pay if the rate rose by one or two percentage points. Second, the instalment is only the loan. Everything below sits on top of it.
The service charge: the cost of the building
The service charge pays for the building's shared life: lift operation and maintenance, generator fuel and servicing, common-area lighting and cleaning, security staff, water pumping and building administration. It is usually charged per flat, sometimes by size, and it is set by the building's management — an owners' association, a developer-managed arrangement, or a managing agent.
Service charges vary widely by building, depending on its facilities, age and management quality, so this article gives no figure for them. What a buyer should do instead is ask for the current schedule before buying: what the charge is, what it covers, how often it has risen, and what happens when owners default. A building with a low charge but poor maintenance is not cheap; it is deferring costs that will arrive later as special levies or deteriorating facilities. A building with a higher charge but reliable lifts, water and security may be better value over five years than a cheaper-looking alternative.
Maintenance inside the flat
Separate from the service charge is maintenance inside the flat itself: plumbing and electrical repairs, painting, appliance servicing, pest control and the replacement of fittings as they wear out. These costs are irregular — quiet for months, then suddenly necessary — which is why they are easy to omit from a monthly budget and hard to ignore when they arrive. A prudent household treats them as a regular monthly provision, even in months when nothing breaks, rather than funding each repair from savings or borrowing.
Older flats generally need more of this provision than newer ones, and flats with ageing plumbing, wiring or waterproofing need the most. A pre-purchase inspection that looks beyond fresh paint — at bathrooms, kitchens, balconies and ceilings for signs of damp or past repairs — gives a buyer a better sense of what this line is likely to cost.
Utilities: the costs that follow usage
Electricity, gas, water and internet are the most familiar monthly costs, and the most variable. They depend on household size, appliance use, air-conditioning and the building's own arrangements for water and backup power. A flat with a generator backup, for example, may carry fuel-related charges that a flat without one does not. A household should estimate these from the building's actual arrangements and its own usage, not from a seller's assurance that bills are 'low'.
Utilities also interact with the other lines: a poorly ventilated or heat-exposed flat will cost more to cool, just as a flat with inefficient lighting or ageing appliances will cost more to run. Energy use is therefore partly a property choice, not only a behaviour choice.
The sinking fund: saving for the large repair
The most commonly forgotten line is the sinking fund — a regular provision for large, infrequent building works: lift replacement, roof and waterproofing renewal, generator replacement, repainting of common areas, or major plumbing overhauls. These are not monthly expenses, but they are predictable in kind, if not in timing. A building that makes no provision for them will eventually face a large one-off levy, often at a moment when owners are least prepared.
Buyers should ask whether the building maintains such a fund, how it is governed, and what major works are expected in the coming years. If there is no fund, the household should create its own provision — a small monthly amount set aside for its share of future building works — rather than treating the absence of a fund as a saving.
Putting the monthly picture together
A realistic monthly budget for owning a flat therefore looks like this: instalment, plus service charge, plus an allowance for inside-flat maintenance, plus utilities, plus a sinking-fund provision. No single figure in this article is a quote for any of these lines, because each varies by flat, building and household. The point is structural: the instalment is the largest line, but the other lines together are large enough to change whether a purchase is affordable.
Before committing, a household can test its budget with four questions. Can it pay the instalment plus all the other monthly lines without depending on overtime, bonuses or an insecure second income? Does it still hold an emergency reserve after paying the deposit and transaction costs? Could it still pay if the loan rate rose by one or two percentage points? And if it had to sell within five years, would the flat's location, building quality and documentation make a sale realistic? If several answers are uncertain, a smaller loan, a smaller flat or a longer saving period is usually more prudent than stretching to the maximum the bank will lend.
Owning a home in Dhaka is, for most families, the largest financial commitment they will make. Budgeting for its true monthly cost — not only its instalment — is what turns that commitment from a strain into a plan.
This article is informational only and is not financial advice. Loan rates, tenures, charges and eligibility vary by bank, building and borrower; confirm the actual offer and the building's charge schedule in writing before making any decision.
Follow Estate News on Facebook for daily property, market and money updates: https://www.facebook.com/profile.php?id=61593817347872
