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Affordable Home Loan FAQ's

What is Pradhan Mantri Awas Yojana (PMAY) Credit Linked Subsidy Scheme?

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Credit Linked Subsidy, is a scheme launched by our Honourable Prime Minister Shri Narendra Modi for Economically Weaker Section (EWS), Low Income Group (LIG) and Middle Income Group (MIG – I & MIG –II). The beneficiary would be eligible for interest subsidy on purchase/construction of a house. The scheme is also available for enhancement of a dwelling unit.

Can I avail a home loan at 5.11% interest rate?

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5.11% interest rate is an effective interest rate for first year for home loan borrowers considering the subsidy under Pradhan Mantri Awas Yojana (PMAY) and Income Tax benefit for a year.

 

For example: If your annual family income is Rs. 15 lakh and avail a home loan of Rs. 25 lakh from ICICI Bank with Credit Linked Subsidy Scheme (CLSS) of PMAY, then you would receive a subsidy of Rs. 2.30 lakh. Also on your above income, you would be able to avail income tax benefit of Rs. 72,244 for a year. Therefore, though the interest rate applied to your loan account is 9.05% p.a., the effective interest rate would be 5.11% p.a. for the first year considering the above benefits.

Is ICICI Bank offering 5.11% interest rate on home loan?

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5.11% interest rate per annum is an effective interest rate for home loan borrowers for the first year considering the subsidy under Pradhan Mantri Awas Yojana (PMAY) and income tax benefit as per income slab.

 

For example: If your annual family income is Rs. 15 lakh and avail a home loan of Rs. 25 lakh from ICICI Bank with Credit Linked Subsidy Scheme (CLSS) of PMAY, then you would receive a subsidy of Rs. 2.30 lakh. Also on your above income, you would be able to avail income tax benefit of Rs. 72,244 for a year. Therefore, though the interest rate applied to your loan account is 9.05% p.a., the effective interest rate would be 5.11% p.a. for the first year considering the above benefits.

Will this interest rate continue throughout the loan tenure?

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This interest rate would be applicable only for the first year and would change for the subsequent years as per the income tax slabs applicable on your prevailing income.

Is this rate applicable, if I am not eligible for PMAY?

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No. This rate is not applicable if you are not eligible for PMAY.

Is this rate applicable only for first time home buyers?

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Yes. This rate is applicable only for first time pucca home buyers, as this norm is as per PMAY criteria.