How home loans for home buyers have become cheaper

Property rates are see-sawing, there are reports of how real estate is not a good space to be in right now, thanks to demonetisation and the clampdowns by the government and the taxman. But, the Pradhan Mantri Awas Yojana could now be a boon for many first-time house buyers, yes, even those who do not come under the scheme as announced in Budget 2017

Initially the Awas Yojna, when launched in 2015, was looking to provide help in making housing affordable for all by 2022. It provided for a subsidy for low-cost housing and an interest rate subsidy of 6.5 per cent  for loans up to Rs 6 lakh taken for the purpose. Then when there were not many takers for the scheme, Prime Minister Narendra Modi, in his New Year’s eve address to the nation increased the coverage of the scheme. It then included loans up to Rs 9 lakh and up to Rs 12 lakh, with an interest subsidy of 4% and 3% respectively for home loans taken under this scheme.

WHAT IT MEANS AFTER BUDGET

Affordable and spacious houses is what the middle-class and the newly-salaried individuals are looking for when they go in search of property. Under this scheme now houses (1BHK, 2BHK) priced anywhere between Rs 20 lakh and Rs 40 lakh, depending upon the city and the location of the housing project will be more accessible.

Further, the government has announced subsidies for two new slabs. The new slabs will apply to loans with tenure of up to 20 years against the limit of 15 years. This subsidy has been extended to those in the income slab up to Rs 12 lakh per annum  and Rs 18 lakh per annum. Accordingly,  people earning up to Rs 12 lakh per annum will get interest subsidy of 4 per cent  on an amount of Rs 9 lakh. Those earning up to Rs 18 lakh per annum will be given a subsidy of 3 per cent  on an amount  of Rs 12 lakh.

People under all three categories will enjoy a benefit of Rs 2.4 lakh (assuming an interest rate of 9 percent per annum).

• home loans
• budget 2017
• first time home owner