Planning to buy your first house? Govt has lined up these benefits on home loans

Those below the income slab of Rs 6 lakh per annum, get a subsidy of 6.5 percentage points on a principal component of Rs 6 lakh, irrespective of their total loan amount. Suppose they borrowed Rs 20 lakh for buying a house at 9 per cent per annum, they will have to pay only 2.5 percent interest on Rs 6 lakh. On Rs 14 lakh, they will be required to pay 9 percent interest.

Under the extension of income slabs for giving subsidy to first-time home buyers, the government has announced two new slabs. The new slabs will apply to loans with tenure of up to 20 years against the limit of 15 years currently, says a report in The Times of India.

The subsidy has been extended to those in the income slab up to Rs 12 lakh per annum  and Rs 18 lakh per annum.

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Now, people earning up to Rs 12 lakh per annum will get interest subsidy of 4 percentage points on a principal amount of Rs 9 lakh. Those earning up to Rs 18 lakh per annum will be given a subsidy of 3 percentage points on a principal component of Rs 12 lakh.

In the next bracket, people earning up to Rs 12 lakh per annum will get interest subsidy of 4 percentage points on a principal component of Rs 9 lakh, and the highest income category of Rs 18 lakh per annum will get a subsidy of 3 percentage points on a principal component of Rs 12 lakh.

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People under all three categories will enjoy a benefit of Rs 2.4 lakh (assuming an interest rate of 9 percent per annum) and monthly installment on home loan is likely to be reduced by roughly Rs 2,200, the report says.

Under Prime Minister Awas Yojana (PMAY) launched on June 25, 2015, the government announced construction of 2 crore homes by 2022. On December 31, 2016, PM Narendra Modi unveiled two subsidy schemes under PMAY whose details have been drawn now.

National Housing Bank (NHB) and HUDCO are the nodal agencies to implement the home loan subsidy schemes.