Be it the year 2000 or 2018, buying a new home has never been a cakewalk. Not much has changed in the passing years for home-buyers, except schemes and offers to choose from. Gone are the days when financial institutions were the preferred go-to option while applying for a home loan.

Today it is different. Today, the procedures are easy, options have multiplied and many can afford a home. Buying a home is not only dependent on low Interest Rate, but also on the scheme you choose. That is why, banks and financial institutions are assisting you achieve your long-cherished dream of buying a home with their tailor-made Home Loan products. These offerings are suited to meet your criteria such as home loan eligibility and suitable interest rates.

With the introduction of Government of India’s Pradhan Mantri Awas Yojana (PMAY), affording a home just became more seamless. The initiative is to achieve ‘Housing for All by 2022’. 

What is PMAY?

As part of the Government's "Housing For All" initiative, the Government has increased the carpet area of houses eligible for interest subsidy under its affordable housing scheme, Pradhan Mantri Awas Yojana (PMAY). This offers a subsidy on interest repayments to home loan borrowers who are buying their first home. Or more specifically, this is an opportunity for home-buying aspirants to achieve their dream.

Why to opt for PMAY?

As per the Pradhan Mantri Awas Yojana (PMAY), the interest subsidy will be credited upfront to the loan account of the beneficiaries through the financial lending institutions. This will effectively reduce the EMI on your Housing Loan.

Benefit of Interest Subsidy

For Low Income Group (LIG) and Economically Weaker Section (EWS), the maximum household income can be up to Rs. 6 lakh per annum. The interest subsidy that can be availed by these 2 groups is 6.50%. On the other hand, the household income for Middle Income Group-1 (MIG 1) can range between Rs. 6 lakh and Rs. 12 lakh per annum and for MIG 2, it can range between Rs. 12 lakh and Rs. 18 lakh per annum. The interest subsidy that can be availed by MIG 1 and MIG 2 are 4% and 3%, respectively.

PMAY will give a boost to the housing sector. This scheme will help in bringing down the overall interest amount for home loan borrowers, and thus help home-buying 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.