The PMAY scheme was put into place to promote affordable ‘housing for all’. This scheme initially brought into action 3 sub-schemes based on economic sub-divisions of the Indian society. These sub-schemes further mentions the carpet area and the home loan interest subsidies that each income group is permitted to enjoy. However, in a recent development, the government has mentioned that they are ready to implement an increase in the carpet area permit of the MIG I and MIG II category.
How will the change in carpet area impact and alter the PMAY eligibility?
As per the earlier limitations in the carpet area, if you belong to the MIG I category then you was eligible to attain subsidy on a home loan taken to purchase a home of up 120 square meters and for MIG II the cap was put at 150 square meters. However, after the revisions put into place, under the MIG I category you can enjoy an increased cap of 160 square meters and for MIG II, a cap of 200 square meters.
This alteration of the carpet area limit will in turn impact and increase your benefits under Pradhan Mantri Awas Yojana. So, apart from owning a bigger home, now you will also gain from the subsidies on your home loan interest rates. Here is how the subsidy for each group is calculated for Pradhan Mantri Awas Yojana scheme.
- EWS and LIG category is allowed a Credit-Linked subsidy of 6.5% on a home loan of up to Rs.6 lakh.
- MIG I category is allowed subsidy of Credit-Linked 4% on a home loan of up to Rs.9 lakh.
- MIG II category is allowed subsidy of Credit-Linked 3% on a home loan of up to Rs.12 lakh.
So, for example, say you take a Home Loan of Rs.6 lakh on a 9% interest rate. Then your EMIs will be Rs.5,398 and your total interest cost for more than 20 years will come up to Rs.6.95 lakh. Now, you are eligible for a 6.5% Credit-Linked subsidy, which comes up to Rs.2,67,000. When this subsidy amount is deducted from your loan amount, then the revised loan amount will be Rs.3,33,000. However, this amount is not deducted from your loan at one go. Rather your EMIs get reduced owing to the reduction in interest based on your subsidy cap. To sum up, for MIG I and MIG II categories, now you will be able to enjoy the privilege of a bigger home within the same subsidy cap under PMAY.
Based on your income you can qualify for these categories as follows.
To qualify for the Economically Weaker Section category (EWS) or Lower Income Group category (LIG), your annual household income should be between Rs.3-6 lakh.
To qualify for Middle Income Group I category (MIG I), your annual household income should be between Rs.6-12 lakh.
To qualify for Middle Income Group II category (MIG II), your annual household income should be between Rs.12-18 lakh.
Once you determine your eligibility based on the annual household income, you can apply for PMAY online at the PMAY website: pmaymis.gov.in. Moreover, you can also look for a lender who is listed with PMAY to apply for a home loan. Here, you can choose Bajaj Finserv as a trustworthy option for Home Loan and get a sanction of up to Rs.3.5 crore on a low interest rate for a tenor of up to 25 years.