If you are looking to own a home of your own, under the Pradhan Mantri Awas Yojana (PMAY) scheme, it is perfect time for you to decide the location, builder and the home loan lender!
The low-income earners
Effectively anyone earning below Rs 6 lakh per annum can avail the benefits of subsidized loans provided other conditions are met. The maximum amount of subsidy can be Rs. 2.67 Lakhs.
The middle-income earners
Effectively anyone earning between Rs 6 lakh and Rs 18 lakh per annum can avail the benefits of subsidized loans provided other conditions are met.
The new category MIG comprises of two slabs: the Middle Income Group (MIG) – I, comprising of households having an annual income between Rs.6,00,001 up to Rs.12,00,000. And, the Middle Income Group (MIG) – II, comprising of households having an annual income between Rs.12, 00,001 up to Rs.18, 00,000.
Source: The Economic Times
The scheme is primarily aimed at providing housing for all.
- The beneficiary family should not own a pucca house in his/her or in the name of any member of his/her family in any part of India.
- In case of a married couple, either of the spouse or both together in joint ownership will be eligible for a single subsidy.
- The beneficiary family should not have availed of central assistance under any housing scheme from the Government of India or any benefit under any scheme in PMAY.
But, as per the guidelines, “An adult earning member (irrespective of marital status) can be treated as a separate household, provided that he/she does not own a pucca (an all-weather dwelling unit) house in his / her name in any part of India.”
So, even if children (married or unmarried) are staying with their parents in a house owned by the parents (or on rent, in the same or another city), they can opt for PMAY provided they are earning and don’t own any other home.
In the MIG – I category, individuals will get 4 percent interest subsidy on a loan amount up to Rs 9 lakh, and in the MIG – II slab category individuals will get a 3 percent subsidy on a loan amount up to Rs 12 lakh. If one needs an additional loan, the lender will prove it but the additional loans beyond the subsidized loan amount will be at a non-subsidised rate.
How does it work
Say, someone in the MIG II category, wishes to buy a house costing Rs 60 lakh. After the mandatory minimum down payment of 20 percent i.e. Rs 12 lakh, the balance of Rs 48 lakh can be arranged through a loan. But under PMAY, a subsidy of 3 percent would be applicable till Rs 12 lakh, hence, the lender’s home loan interest rate will be applicable on the balance of Rs 36 lakh.
The interest subsidy will be credited upfront to the loan account of beneficiaries resulting in reduced effective housing loan (deducting it from the principal loan amount) and Equated Monthly Installment (EMI). The borrower will pay EMI as per agreed document rates on the remainder of the principal loan amount.
How to avail PMAY scheme
Availing PMAY is fairly easy for home buyers. You just need to go to the official website of PMAY and download a subsidy form, fill the application form and attach the same along with bank loan application, and you're done!
If you are eligible for the scheme, you must avail its benefits as it will reduce your burden of EMI a little.
At Aspire, we believe in empowering home buyers by providing them with necessary information about real estate. If you have any doubts regarding PMAY or anything else, our team would love to assist you.