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Home Loan Subsidy

Subsidy on Home Loan by Government

Last Updated 30th Oct 2020

  • Applicants with a maximum annual family income of ₹ 18 Lakh are eligible for the home loan subsidy scheme.
  • Avail subsidy on interest up to 6.5% and subsidy amount up to ₹ 2.67 Lakh.
  • Carpet area must be within 260 sqm.
  • Individuals already owning a pucca house can not avail subsidy.
  • Female ownership, sole or joint is a must.
  • PMAY subsidy is categorized into 4 income segments i.e. Economically Weaker Section (EWS), Low Income Group (LIG), Medium Income Group 1 (MIG-1) and Medium Income Group 2 (MIG-2).
PMAY Subsidy Calculator
Best Offers on Home Loan offerOffers
Bank/NBFCs Rate* EMI per Lakh* Action
SBI6.95%₹ 662Check Eligibility
HDFC6.90%₹ 659Check Eligibility
ICICI Bank6.90%₹ 659Check Eligibility

* Starting From

What is Housing Loan Subsidy?

With the objective of providing affordable housing to all, the Indian Government introduced the Pradhan Mantri Awas Yojana Scheme in 2015. One of the instruments via which this scheme provides financial assistance is the home loan subsidy. Under the Credit Link Subsidy Scheme or CLSS of PMAY, you can avail subsidy up to 6.5% on the interest rate of your home loan.

To speed up the operations of the PMAY scheme, Credit Link Subsidy Scheme focuses on increasing the availability of credit at low-interest rates. Housing Urban Department Corporation and National Housing Bank jointly execute the scheme and ensure all eligible applicants are benefited by the scheme. Before you can avail the scheme, you must know what the eligibility criteria are and how to apply for home loan subsidy.

Who is Eligible for Pradhan Mantri Home Loan Subsidy Scheme?

Below go the eligibility criteria for the housing loan subsidy scheme.

  • The applicants must not own any pucca house anywhere in the country.
  • The annual household income of any applicant must not cross ₹ 18 Lakh.
  • The applicant must not have availed any financial assistance under any Government housing scheme previously.
  • The deed or property paper must include the name of a female member of the family. Joint ownership with a female member is eligible as well.
  • All towns as per the Census 2011 and the towns subsequently notified are covered under the scheme.
  • The construction, extension or renovation of the property for which home loan has been availed, must be completed within 36 months from receiving the loan amount.
  • Already built houses do not come under the coverage of the scheme.

Apart from the above-mentioned criteria, the home loan subsidy eligibility and the benefits are decided based on the income group. To become a beneficiary of the scheme, you must fall under any of the following four incomes groups.

  • EWS or Economically Weaker Section
  • LIG or Low-Income Group
  • MIG-l (Middle Income Group 1)
  • MIG-ll (Middle Income Group 2)

What are the Benefits of CLSS Scheme?

Here are the benefits that the beneficiaries get under the housing loan subsidy scheme.

  • You will get a subsidised interest rate up to a certain amount on your home loans.
  • The subsidised amount under the scheme is directly transferred into your account. Thus, your outstanding principal gets reduced and so does your EMI.
  • You can extend your loan tenure up to 20 years.
  • There is no maximum limit to the loan amount. If the amount crosses the specified limits, the interest will be at the standard rate provided by the lender.
  • You can enjoy tax benefits under the subsidy on home loan by government as stated in the Income Tax Act of 1961.

The key benefit of the CLSS is the subsidized interest rate. The subsidy is decided based on the income groups. For a better understanding, here is a complete table of the subsidy rates of the income groups along with the maximum loan limit.

Annual Household Income Income Group Carpet area Maximum loan amount Maximum Subsidy Amount Subsidised Interest Rate
Up to ₹ 3 Lakh EWS 30 sqm ₹ 6 Lakh ₹ 2.67 Lakh 6.50%
From ₹ 3 Lakh to ₹ 6 Lakh LIG 60 sqm ₹ 6 Lakh ₹ 2.67 Lakh 6.50%
From ₹ 6 Lakh to ₹ 12 Lakh MIG-l 160 sqm ₹ 9 Lakh ₹ 2.35 Lakh 4.00%
From ₹ 12 Lakh to ₹ 18 Lakh MIG-ll 200 sqm ₹ 12 Lakh ₹ 2.30 Lakh 3.00%

For instance, you have applied for a home loan of ₹ 12 Lakh at an interest rate of 8.5% and with a tenure of 20 years. In such a scenario you will be paying an EMI of ₹ 10,414 and the total payable interest will be ₹ 12,99,331. Now suppose, you have availed a 3% subsidy on home loan by government under the MIG-ll group. Your EMI will be reduced to Rs₹ 8,418. The total payable interest will be ₹ 10,50,292. Under the subsidy scheme, you will save ₹ 1,996 on each EMI and a total interest of ₹ 2,49,039.

Why approach MyLoanCare for a Home Loan with Interest Subsidy?

With MyLoanCare find out the home loan subsidy eligibility and apply for the scheme without putting much effort or time. The website generates quick quotes and shows the list of the best banks providing home loan to help you in making the correct decision. Coming to how to apply for home loan subsidy, all you need to do is visit MyLoanCare, click on the Home Loan section and provide your information. A MyLoanCare advisor will give you a call and confirm all the details. If you are eligible under the scheme, we will directly transfer your application to the bank. The bank will verify the application, and if all looks good, your loan will be sanctioned. 

FAQs

How can I check my home loan subsidy?

You can check your home loan subsidy in the following steps.

  • Visit the official website of PMAY.
  • Tap on ‘Citizen Assessment’ and then select ‘Track Your Assessment.
  • You will be redirected to the next page.
  • Select from the given options of ‘By Name, Father’s Name and Mobile No’ or ‘By Assessment ID’.
  • Enter the required data and tap on ‘Submit’.

Who is eligible for PMAY subsidy?

Followings are eligible for PMAY subsidy.

  • Individuals with no ownership of a pucca house.
  • Individuals with a maximum household annual income of ₹ 18 Lakh.
  • Individuals availing no other benefits under any government housing scheme.
  • Individuals meeting the income group categories under the scheme.

How is home loan subsidy calculated?

You can calculate the home loan subsidy using the subsidy calculator. Enter your household annual income, loan amount, tenure and interest rate. The calculator will generate the subsidy amount.

How can I get Modi home loan?

Follow these steps for availing Modi home loan.

  • Go to the PMAY official website.
  • Select your respective category from the ‘Citizen Assessment’ tab.
  • Enter your Aadhaar Number for Aadhaar verification.
  • Fill up the form with all necessary information and make the submission.

Is female ownership mandatory for PMAY Subsidy?

A female name must be on the property deed or papers for PMAY subsidy. It can either be a sole proprietorship or joint ownership. This term is overlooked only if the household does not have any female member.

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