Home loan subsidy

The interest subsidy on home loan by the government of India is available for 3 income groups: EWS, LIG, and MIG. Read on to know more about the eligibility criteria for the EWS or Economically Weaker Section. The annual income of the household – up to Rs. 3 lakh

• Home loan amount on which subsidy is calculated – up to Rs. 6 lakh
• Rate of interest subsidy – 6.50%
• The house’s carpet area – up to 60 square metres

Eligibility criteria for the lower income group

For applicants falling under the LIG or Lower Income Group

• Yearly income of the household – from Rs. 3 lakh up to Rs. 6 lakh
• Home loan amount on which subsidy is calculated – up to Rs. 6 lakh
• Rate of interest subsidy – 6.50%.
• The house’s carpet area – up to 60 square metres

Applicants from the EWS and LIG categories can avail of a maximum home loan subsidy of up to Rs. 2.67 lakh.

Eligibility criteria for the medium income group I

For those falling under the Medium Income Group or MIG I

• The annual income of the household – from Rs. 6 lakh up to Rs. 12 lakh
• Home loan amount on which subsidy is calculated – up to Rs. 9 lakh
• Rate of interest subsidy – 4%
• The house’s carpet area – up to 160 square metres

Eligibility criteria for the medium income group I

For those falling under the Medium Income Group or MIG II

• Yearly income of the household – from Rs. 12 lakh up to Rs. 18 lakh
• Home loan amount on which subsidy is calculated – up to Rs. 12 lakh
• Rate of interest subsidy – 3%
• The house’s carpet area – up to 200 square metres

Eligible candidates from MIG I & MIG II categories can avail a maximum subsidy on home loan interest of up to Rs. 2.35 lakh.

Note: The carpet area is the actual area within the walls where you can lay a carpet. It is excluding the inner wall’s thickness and common spaces like stairs or lobby.

Other eligibility factors

Apart from the annual income, applicants must fulfil the following requirements:

• For EWS/ LIG groups, a female member must own or co-own the house (with terms and conditions applied).
• No member of the household should own a pucca house anywhere in this country. The new property must be their first house
• The beneficiary family must not have availed any government-backed housing scheme before
• The family availing the CLSS benefits must comprise the husband and wife along with their unmarried children (son/ daughter)
• In the case of married applicants, either or both the spouses can qualify to avail the subsidy on a home loan on a single property
• An adult earning member of a family is considered as an independent beneficiary of this home loan interest subsidy
• A subsidy on home loan interest rate is applicable on funds utilised for the purchase, construction, or renovation of a residential property. However, MIG I and MIG II applicants can use the loan amount only to purchase a house
• Under this PMAY CLSS scheme, the maximum tenor of a home loan must be 20 years

When approving applications for the CLSS benefit, the government further prioritises women, transgender individuals, minorities, and widows to encourage homeownership.

What are the benefits of CLSS?

• Borrowers receive the subsidised amount from the government directly in their loan account. This brings down their outstanding principal amount, thus reducing their subsequent EMIs
• As EMIs become more manageable, it’s easier to repay the housing loan. However, if borrowers choose to continue paying the original EMI amount, the loan tenor shortens. As a borrower, you can select a suitable option as per your requirements
• Applicants claiming this interest subsidy can also avail tax benefits on the home loan. According to the IT Act 1961, tax exemptions of up to Rs. 2 lakh on the payable interest and up to Rs. 1.5 lakh on the principal repayment may be claimed in one fiscal year

Here’s an example:
Say you avail a loan of Rs. 32 lakh with a repayment tenor of 20 years, and you come under the MIG II category. Usually, the EMIs per month come to around Rs. 31,000. Now, the loan amount eligible for the interest subsidy is Rs. 12 lakh. If you calculate your EMIs with a 3% rate of subsidy based on the Excel PMT formula, the EMIs reduce to around Rs. 7,000 per month.

Use the online Pradhan Mantri Awas Yojana calculator offered by Bajaj Finserv to check your subsidy amount and the category you fall into instantly. You only need to enter the following details – repayment tenor, home loan amount, annual income of your household, and carpet area. Also, confirm that this is your 1st pucca house to be eligible.

Once you qualify, apply for this mortgage loan and avail exclusive benefits such as the following.

• No part-prepayment and foreclosure charges
• Value-added services such as property search and a property dossier
• Online account management facility 24X7
• Online Home Loan
  
• Minimal documentation
• Digital Sanction Letter in minutes 
• Flexible tenor
• Flexi Hybrid feature that reduces your EMIs almost by half in the initial tenor

Further, you get the benefit of an easy home loan balance transfer facility to switch your home from your existing lender to us to enjoy lower interest rates. In this case, you can also get an ample top-up loan. This refers to an additional credit that you can avail to address home-related or any other expenses at a nominal rate of interest.

Note: If you have already received an interest subsidy on existing home loan, you cannot claim another subsidy when availing the balance transfer facility for better rates.