Pradhan Mantri Awas Yojana Home Loan Interest Rates/Subsidy 2017

January 7, 2017 | Last Modified: March 23, 2017 at 12:03 pm | Category: Central Government, Pradhan Mantri Yojana

There is a very good news for the home seekers, central government has announced even more subsidy in home loan interest rates under Pradhan Mantri Awas Yojana. Prime Minister Narendra Modi announced the interest subsidy on housing loans taken under Pradhan Mantri Awas Yojana during his speech to the nation on 31st December 2016.

The amount of home loan under the scheme has been increased by double to 12 Lakh and the interest subsidy would now be up to 4%. Below is the interest subsidy comparison of earlier PMAY scheme and revised scheme.

PMAY Loan Scheme for MIG: PM Awas Yojana Loan Scheme for MIG – Interest Rates, Subsidy & EMI

PMAY Home Loans Interest Rates/Subsidy for 2017

Subsidies Explained Earlier Scheme (2015) – CLSS for EWS/LIG Revised Scheme (2017) – CLSS for MIG
Loan Amount Up to Rs. 6 Lakh Up to Rs. 9 Lakh Up to Rs. 12 Lakh
Eligibility Criteria EWS (Annual income of Up to Rs. 3 Lakh) and LIG (Income of up to Rs. 6 Lakh per annum). Women to be the co-owner along with the beneficiary. MIG 1 – Up to Rs. 12 Lakh per annum MIG 2 – Up to Rs. 18 Lakh per annum
Subsidy Calculation for a loan tenure of up to 15 years 6.5% 4% 3%
Subsidy Amount Rs. 2.2 Lakh for a loan of 6 lakh Rs. 2.35 Lakh for a loan of Rs 9 Lakh Rs. 2.3 Lakh for a loan of Rs. 12 Lakh
Interest Rates and Subsidy
Interest Rate 10.5% 8.5%
Loan Amount Rs. 12 Lakh Rs. 9 Lakh or More Rs. 12 Lakh or More
Amount Eligible for Subsidy Rs. 6 Lakh Rs. 9 Lakh Rs. 12 Lakh
Subsidy Rate 6.5% 4% 3%
Subsidy Amount 2.2 Lakh 2.35 Lakh 2.3 Lakh

The increased loan amount under the PM Awas Yojana will significantly reduce the monthly installments. The central government instead of 6.5% subsidy on loans up to Rs. 6 Lakh, now providing 4% subsidy on loans up to Rs. 9 Lakh and 3% for home loans up to Rs. 12 Lakh. The loans under PMAY can be availed for a maximum tenure of 20 years (earlier 15). The government has also introduced two new middle income group categories under the scheme.

At present, the home loans are available from banks and non banking financing companies at interest rates of about 9%. After the interest subvention of 4%, the effective interest rate would fall to 5% which will result in significant reduction in EMI’s.

PMAY Home Loan Interest Rate Calculation

For example, if an individual takes loan of Rs 9 lakh for a 15 years, 4% lower interest rate would save him Rs. 2,011 in EMI every month as his EMI will come down from Rs 9,128 to Rs 7,117. Similarly, on a loan of Rs 12 lakh will save Rs 2,044 in EMI on account of the 3 per cent lower interest rate.

Online Applications for Pradhan Mantri Awas Yojana – Urban are being invited through CSC’s and official website at pmaymis.gov.in.

The central government is also providing interest subvention of 3% on home loans taken in 2017 for new home construction or renovation under PM Awas Yojana – Gramin. Find the complete details of PMAY-G home loan scheme 2017 announced by Narendra Modi.

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