Launched in the year 2015, the Pradhan Mantri Awas Yojana aims at providing 20 million affordable houses to people belonging to the financially weaker section by the year 2022. PMAY is categorized into two categories, viz. PMAY- Urban (PMAY-U) and PMAY Rural (PMAY-R). Depending upon the income group, the eligible urban beneficiaries can avail Pradhan Mantri Awas Yojana subsides on their home loan interest rate under the Credit-Linked Subsidy Scheme (CLSS) of PMAY. The urban beneficiaries are classified into the following income group:
- Economically Weaker Section (EWS)
- Lower Income Group (LIG)
- Middle-Income Group I (MIG-I)
- Middle-Income Group II (MIG-II)
Let’s have a look at the maximum subsidy middle-income earners can avail under the CLSS introduced by PMAY.
Middle-Income Group I (MIG-I)
- Individuals with an annual household income between Rs.6,00,001 up to Rs.12,00,000 are qualified under the Middle-Income Group I
- Beneficiaries under MIG-I category can avail an interest subsidy of 4% on a home loan up to Rs 9 lakhs.
Middle-Income Group II (MIG-II)
- Individuals with an annual household income between Rs.12, 00,001 to Rs.18, 00,000 qualify under the Middle-Income Group II
- Beneficiaries under MIG-II can avail an interest subsidy of 3% on a home loan of up to Rs 12 lakhs.
PMAY (U) features and benefits for Middle-Income Group
- The carpet area allotted to MIG-1 beneficiaries is 968 sq. ft (90 sq-m), whereas the carpet area allotted to MIG-2 beneficiaries, is 1184 sq ft (110 sq-m)
- The loan tenure is a maximum of 20 years in both cases.
- The Net Present Value (NPV) subsidy for MIG-1 beneficiaries is Rs. 2.35 lakhs, whereas the NPV subsidy for MIG-2 beneficiaries is Rs. 2.30 lakhs.
- The eligible urban residents can opt for PMAY online apply to avail the benefit of this scheme
NPV Calculation for MIG-1
|Income||Up to Rs 12,00,000|
|Original loan amount(A) for 20 years (8.5%)||Rs 9,00,000|
|Total interest (20 years)||Rs. 9,74,498|
|NPV: After subsidy of 4% (B)||Rs. 2,35,000|
|Reduced Loan (A-B) for 20 years (9%)||Rs. 6,65,000|
|New EMI||Rs. 5,771|
|Total interest (20 years)||Rs. 7,20,045|
|EMI saved||Rs. 2,039|
|Interest saved||Rs. 2,54,453|
|Govt. Subsidy||Rs. 2,35,000|
NPV Calculation for MIG-2
|Income||Up to Rs 18,00,000|
|Original loan amount(A) for 20 years (8.5%)||Rs 12,00,000|
|Total interest (20 years)||Rs. 12,99,331|
|NPV: After subsidy of 3% (B)||Rs. 2,30,000|
|Reduced Loan (A-B) for 20 years (8.5%)||Rs. 9,70,000|
|New EMI||Rs. 8,418|
|Total interest (20 years)||Rs. 10,50,292|
|EMI saved||Rs. 1,996|
|Interest saved||Rs. 2,49,039|
|Govt. Subsidy||Rs. 2,30,000|
Considering the prices of property in the metro cities, the home loan subsidy of Rs 2.3 lakh/Rs 2.35 lakh may not appeal much to the urban residents belonging to the MIG category. Hence, to increase the demand of the PMAY scheme in such metro cities, the government may consider doing away with the area restriction of 90/110 sq mt
Eligibility criteria for PMAY Subsidy
- The applicants should not have a house registered under their own name or under the name of any member of their family members.
- If any family member of the applicant has already availed central assistance from the Government of India, then they won’t be eligible to benefit from this scheme.
- For married couples, either of the spouse or both together in joint ownership will qualify for a single subsidy.
Beneficiaries can avail a housing loan under PMAY scheme from any primary lending institutions such as Scheduled Commercial Banks, Housing Finance Companies, and Regional Rural Banks. Moreover, State Cooperative Banks, Urban Cooperative Banks, Small Finance Banks, and Non-Banking Financial Companies (NBFCs) are also registered to function as primary lending institutions. The beneficiaries won’t be charged any processing fees while applying for a home loan under the PMAY scheme for eligible housing loan amount as per income criteria under the Scheme.
While availing a home loan, it is advisable that beneficiaries calculate their home loan EMI beforehand. This will help them plan their monthly budget wisely. Comparing various loan offers provided by different financial institutions can help the beneficiaries of PMAY scheme avail the best housing loan for themselves.
The Bajaj Finserv Home Loan available on Finserv MARKETS offers competitive interest rates and other lucrative features such as flexible repayment options, no hidden charges, etc. The easy online application process, instant approval of the loan application and quick disbursal are some of the added advantages of availing a Bajaj Finserv Home Loan.
Home loan borrowers should read the terms and conditions of the home loan agreement carefully before signing it. This will help them avoid any inconvenience in the later stage.
You can also know about eligibility of PMAY. And you can check your eligibility for home loan and EMI with the help of home loan eligibility calculator and home loan emi calculator.
Read more about Government Housing Schemes
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