Housing for All Scheme was introduced by the Government of India to provide affordable housing to all. It was launched by Prime Minister Narendra Modi on 1st June 2015. The mission of this initiative is to provide housing for all by the year 2022.
This scheme targets specific groups which are listed below:
- Economically Weaker Section (EWS)
- Lower Income Group (LIG)
- Medium Income Group (MIG-I)
- Medium Income Group (MIG-II)
- Scheduled Caste
- Scheduled Tribe
Home Loan Interest Rate for PMAY Scheme
The Government of India applies interest rates and provides interest subsidy depending on the loan amount, the annual income of the borrower and category of the borrower.
- EWS and LIG category
- Individuals with an annual income up to Rs.6 lakhs fall under the EWS and LIG category.
- Under this category, you can get an interest subsidy of 6.5% for a loan amount up to Rs.6 lakhs.
- The carpet area of the house should be 60 sq. mts.
- The maximum interest subsidy available is Rs.2.67 lakhs.
- MIG-I category
- Individuals with an annual income up to Rs.12 lakhs fall under the MIG-I category.
- Under this category, you can get an interest subsidy of 4% for a loan amount up to Rs.9 lakhs.
- The carpet area of the house should be 160 sq. mts.
- The maximum interest subsidy available is Rs.2.35 lakhs.
- MIG-II category
- Individuals with an annual income up to Rs.18 lakhs fall under the MIG-II category.
- Under this category, you can get an interest subsidy of 3% for a loan amount up to Rs.12 lakhs.
- The carpet area of the house should be 200 sq. mts.
- The maximum interest subsidy available is Rs.2.30 lakhs.
The interest rate on the loan amount beyond the above-mentioned limits will be calculated on the basis of the regular home loan interest rates. The Net Present Value (NPV) of the interest subsidy will be calculated at a discount rate of 9%. There is no cap on the maximum loan amount or the cost of the house property.
The home loan interest rate is around 9% approximately in the current market conditions. So, if an interest subsidy of 4% is applied to a loan amount of Rs.9 lakhs, then the Effective Interest Rate (EIR) would be 5%, which will benefit the borrowers.
Below is a scheme grid for your easy understanding and reference:
|Income Category||Annual Income||Loan Amount||Interest Subsidy||Carpet Area||Maximum Subsidy||Woman Ownership|
|EWS & LIG||Up to Rs.6 lakhs||Rs.6 lakhs||6.50%||60 sqm||Rs.2.67 lakhs||Mandatory|
|MIG-I||Rs.6 lakhs – Rs.12 lakhs||Rs.9 lakhs||4.00%||160 sqm||Rs.2.35 lakhs||Not Mandatory|
|MIG-II||Rs.12 lakhs – Rs.18 lakhs||Rs.12 lakhs||3.00%||200 sqm||Rs.2.30 lakhs||Not Mandatory|
Procedure for availing subsidized Home Loan Rates under PMAY Scheme
- Loan Application – The first step is to apply for the required loan amount. There are two central agencies where you can apply for this affordable rates on your home loan. They are the National Housing Bank (NHB) and Housing & Urban Development Corporation (HUDCO). These agencies collaborate with the lending institutions who will then help you in availing the interest rates on your loan.
- Approval – After the verification of the application, the lending institution will forward your loan application to NHB or HUDCO for approval.
Subsidy Credit – Once your application is approved by NHB or HUDCO, your loan account will be credited with the amount of the interest subsidy. This will reduce your monthly EMI and interest payments.
The Bottom Line
Housing for All Scheme is one of the best schemes to avail subsidized interest rates on your home loan. Check your PMAY eligibility now and apply for a home loan under the PMAY scheme today.