EMIs For Home Loans To Come Down If Under PM Awas Yojana



The Centre’s announcement of the credit-linked interest subsidy scheme (CLSS) has brought some good news for middle income home buyers. If you’re in the annual income range of Rs 12 lakh to 18 lakh, and are buying a house in a city or town under the Pradhan Mantri Awas Yojana, then you can expect savings of more than Rs. 2 lakh, or Rs. 2000 on monthly home loan instalment or EMI.

While releasing the operational guidelines of the CLSS for Middle Income Group, Union Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu said that the middle income groups, besides paying taxes, have contributed substantially to the growth of the nation. He further said that the middle income group deserved support in fulfilling their dream of owning a house, which he highlighted as a basic and genuine aspiration of any human being. Naidu urged banking and other lending institutions to be proactive in ensuring that the benefits reach the middle income groups.

A total of 70 lending institutions including 45 Housing Finance Companies, 15 Scheduled Banks, 2 Regional Rural Banks, 1 Cooperative Bank, 4 Small Finance Banks, and 3 Non-Banking Finance Companies-Micro Finance Institutions signed Memoranda of Understanding with the National Housing Bank for implementation of the CLSS (MIG) component of PM Awas Yojana.

Those within the annual income range of Rs 6 lakh to Rs 18 lakh are eligible for availing the subsidy. The subsidy benefit will also be extended to those whose home loans have been sanctioned or are under consideration since January 1, 2017.

The Centre has announced an interest subsidy of 4 per cent on housing loans of up to Rs 9 lakh for those with an income of Rs 12 lakh per annum, and of 3 per cent on housing loans of up to Rs 12 lakh for those with an income of Rs 18 lakh per annum. The 3-4 per cent interest subsidy on home loans of Rs 9 lakh to Rs 12 lakh of borrowings stands operative even if the overall loan is higher.

The total interest subsidy on a loan of Rs 9 lakh will come down by Rs 2,062 per month, and on a loan of Rs 12 lakh, it will come down by Rs 2,019 per month, considering normal home loan interest rate as 8.65 per cent.

The benefit will be availed by families comprising of wife, husband and unmarried children. Unmarried young adults in the said income range are also eligible to avail the benefit for buying their first home. The tenure of the loan is up to 20 years, and the total interest subsidy will be paid upfront to the beneficiaries, reducing their EMI burden.

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