Pradhan Mantri Awas Yojana (PMAY) falls under the Government’s mission - “Housing for All by 2022” for urban housing. It makes home loans affordable for the urban poor by providing subsidy on the Interest Rate of a home loan during repayment by way of EMI.

PMAY is loaded with features and benefits as broadly outlined below:

  • The interest subsidy rate provided by the scheme is up to 6.5 % on housing loan to all beneficiaries taking loans with a tenure of up to 20 years
  • Interest rate subsidy, however, varies basis income slabs
    • Up to 6 lakh per annum - Credit-linked subsidy of 6.5 per cent will be available for loan amounts up to Rs 6 lakh
    • Up to 12 lakh per annum - People earning up to Rs 12 lakh per annum will get 4 per cent interest subsidy on a loan amount of Rs 9 lakh
    • Up to 18 lakh per annum - People earning up to Rs 18 lakh per annum income category will get a 3 per cent subsidy on a loan amount of Rs 12 lakh
    • Any additional loan beyond the subsidised loan amount will be at a nonsubsidised rate
  • Under the PMAY scheme, differently able and senior citizens can get the preference of having a house on the ground floor
  • Houses will be constructed using sustainable and eco-friendly technologies


The PMAY benefits can be availed if you wish to acquire a new house from the developer or the builder and also for buying a house on resale. You may even take a loan for the construction of a house. Moreover, it is interesting to know that PMAY also applies for upgrading a ‘kutcha’ house to a ‘pucca’ house under the Credit Linked Subsidy Scheme (CLSS) component.

The preferential and key beneficiaries under PMAY are;

  • Scheduled castes and scheduled tribes
  • Economically Weaker Section (EWS) of the society
  • PMAY is applicable to borrowers belonging to the:
    • Economically Weaker Section (EWS - with a maximum annual family income of Rs. 3,00,00)
    • Low Income Group - (LIG - with maximum annual family income of Rs. 6,00,000) and
    • Middle Income Groups (MIG - I & II - with a maximum annual family income of Rs. 18,00,000)


Provisions have also been made for widows, transgender, senior members and differently able individuals.

Pradhan Mantri Awas Yojana takes a giant stride to help fulfill your dream of owning a home. It energizes your enthusiasm to approach a bank or a private housing finance company for a home loan given the fact that EMIs can turn out to be more affordable.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.