Pradhan Mantri Awas Yojna could help You to Buy Dream Home

  Pradhan Mantri Awas Yojna could help You to Buy Dream Home
  • PMAY offers home loan on subsidised interest rate
  • The subsidised interest rate depends on the household income category
  • There’s a special treatment for women borrowers under PMAY
  • Bajaj Finserv Flexi Hybrid Home Loan offers principal holiday of 4 years

Launched in 2015, the Pradhan Mantri Awas Yojna (PMAY) is a flagship initiative undertaken by the government of India to make housing affordable for all by 2022. PMAY aims to cater to the housing needs of all sections of the society including the economically weaker section (EWS), low-income group (LIG) and the middle-income group (MIG). Read on to know how this scheme could help you in buying your dream home.

Offering subsidised rate of interest

Home loans procured under Pradhan Mantri Awas Yojana are subsidised based on your household income category. This is perhaps the biggest benefit PMAY offers to home loan borrowers. Home loan interest rates have started tightening following RBI’s hike in repo rate and a high-interest rate makes it difficult for borrowers to procure loans and serve EMIs. However, home loans availed under PMAY offer the following interest subsidy to various categories of borrowers for a maximum loan tenor of 20 years:

Category Household Income Interest subsidy (PA) Maximum Interest Subsidy Amount
EWS Rs.0-3,00,000 6.5% Rs.2,67,280
LIG Rs.3,00,001-6,00,000 6.5% Rs.2,67,280
MIG (I) Rs.6,00,001-Rs.12,000,00 4% Rs.2,35,068
MIG(II) Rs.12,000,001-Rs.18,000,00 3% Rs.2,30,156

Also, the Credit Linked Subsidy Scheme (CLSS) for the MIG has been extended until March 2019. The high-interest rate of home loans is seen as a dampener by several experts who believe that the housing segment was on its path of revival following demonetization. They are wary that tightening of interest rate could push away potential borrowers, thereby impeding growth.

However, with subsidised interest rates offered on home loans under PMAY, borrowers can look forward to buying their dream home without worrying about high rates pushing up interest outgo in the long run.

It is essential to note that there are home loans available in the market that offer dynamic interest rate along with added benefits to borrowers. For instance, Bajaj Finserv Flexi Hybrid Home Loan offers a principal repayment period of 4 years whereby home loan borrowers need to pay only interest as EMI for the first 4 years. It’s only after 4 years that the borrower needs to pay the principal component of the EMI.

Also, with pre-approved offers from Bajaj Finserv, availing finance on home loan and others is quick, easy and convenient. There’s no lengthy paperwork and you can get money in your account with 1-step verification. To know your pre-approved offer, all you need to do is share a few basic details.

Increase in carpet are of the house

In a bid to attract more buyers, the government has approved 33% of increase in the carpet area of house eligible for subsidy under PMAY. For MIG (I), the carpet area has been enhanced from 120 sq. metres to 160 sq. metres, while for MIG (II), it has been increased from 150 sq. metres to 200 sq. metres. This will be applicable from 1st January 2019.

Experts believe that the move would encourage more MIG home buyers to avail home loans under PMAY.

Special treatment for woman borrowers

The PMAY scheme has special provisions for women borrowers. Under the PMAY scheme, women are given a preferential allotment of houses over males. Also, home loan applications by women are processed through a special window.

That’s not all. The scheme makes it mandatory to have at least one woman member registered as the owner of the house. Further, women borrowers can get extra interest rate concession on a home loan.

With all these benefits, PMAY helps you borrow home loans at subsidised interest rates to help you buy your dream home. Savings on interest go a long way in addressing other crucial financial goals of life.

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