# Renovating your home: pension savings as collateral

> The 2026 Pension Act amendment lets members pledge pension savings for a loan to renovate an existing house. What renovation loans cost today, from HDFC's 11% Home Improvement to MFLC's Green Loan, where a pension pledge might help, and what to wait for.

Source: Maldives Real Estate News, published by Binga Properties. URL: https://news.binga.mv/pension-collateral-for-renovating-a-home
Published: 2026-10-18T14:00:00.000Z · Updated: 2026-10-18T16:13:52.994Z · Event date: 2026-10-18

The **Sixth Amendment to the Maldives Pension Act**, in force since **21 May 2026**, lets members pledge their pension savings for a loan **to renovate an existing house**. For homeowners, that could mean a cheaper or larger loan to repair, extend or modernise.

## Renovation loans today

| Lender | Product | Rate | Term | Security |
|---|---|---|---|---|
| **HDFC** | Home Improvement | **11%** | up to 15 years | first mortgage; equity 0% (10% if still under construction) |
| **MFLC** | Green Loan (efficient equipment, solar, appliances) | not published | up to 5 years | none up to MVR 250,000; 20% equity |
| **MIB** | Ujaalaa Cash (renovation is an allowed use) | 13% to 15% | 18 to 60 months | unsecured, MVR 25,000 to 700,000 |

*From each lender's site as read on 18 October 2026.*

HDFC's annual report lists what its Home Improvement loan covers: painting, kitchen and sanitary fittings, furniture, additional rooms, lifts and CCTV, up to **MVR 2.5 million**.

## Where pension could help

- **Unsecured loans are dear.** MIB's 13% to 15% compares with 11% on HDFC's secured loan. A pension pledge is extra security, which **may** bring a lower rate, as it does on HDFC's purchase loans (10.42% against 11%).
- **Borrowing without mortgaging.** Some owners would rather not put a second mortgage on the house. Whether a pension pledge could replace or reduce a mortgage is something the regulations will decide.

**None of this is in place yet.** The Pension Office has not published the renovation rules, and no lender offers a pension-backed renovation loan as of 18 October 2026.

## For new flat buyers

The change matters later, not now. When a flat bought off plan needs its **first refit**, years after handover, a pension-backed renovation loan may be an option. For the **fit-out at handover**, today's routes are a separate small loan or cash.

## Questions to ask

1. **Pension Office (1441):** what can be pledged for renovation, and is it limited to a house you live in?
2. **Your lender:** will a pension pledge lower the rate on a renovation loan?
3. **Before you sign:** what happens to the pledge if you sell the home before the loan is repaid?

**Where it stands on 18 October 2026.** The law has been in force since **21 May 2026**. In June the Pension Office said it was writing the regulations and procedures, *"expected to be completed within three months"*. As of 18 October, its news page has announced no regulations for the housing changes. Its housing page still describes **purchase loans only**, and its five approved lenders have published no pension-backed construction or renovation product. Until they do, ask the Pension Office (1441) and your lender before you plan on it.

*From the Pension Office's announcement of 10 June 2026 and its website, read on 18 October 2026. Details will be set by regulations not yet published. General information, not financial advice.*

## Sources
- pension.gov.mv/en/media/news/6th%20amendment%20to%20Pension%20Act (Pension Office, "6th Amendment to the Maldives Pension Act", 10 June 2026) (https://pension.gov.mv/en/media/news/6th%20amendment%20to%20Pension%20Act (Pension Office, "6th Amendment to the Maldives Pension Act", 10 June 2026))
- pension.gov.mv/en/housing (Pension Office, MRPS Housing Benefit, read 18 October 2026) (https://pension.gov.mv/en/housing (Pension Office, MRPS Housing Benefit, read 18 October 2026))
- hdfc.com.mv/conventional-facilities/home-improvement (HDFC Home Improvement, read 18 October 2026) (https://hdfc.com.mv/conventional-facilities/home-improvement (HDFC Home Improvement, read 18 October 2026))
- www.mflc.mv/personal/green-loan-and-lease (MFLC Green Loan, read 18 October 2026) (https://www.mflc.mv/personal/green-loan-and-lease (MFLC Green Loan, read 18 October 2026))
- www.mib.com.mv/personal-financing/ujaalaa-cash (MIB Ujaalaa Cash, read 18 October 2026) (https://www.mib.com.mv/personal-financing/ujaalaa-cash (MIB Ujaalaa Cash, read 18 October 2026))

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