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Reducing Home Loan EMIs with PMAY

Clix June 25, 2018

Almost everyone dreams of owning a house one day. However, for a major section of the Indian population, this dream never sees the light of day. With rising real estate prices, poor financing solutions, and high home loan interest rates, the prospect of owning a home can feel increasingly out of reach.

Fortunately, Prime Minister Shri Narendra Modi’s Pradhan Mantri Awas Yojana (PMAY) aims to provide ‘Housing for All’ by the year 2022. The scheme has two components — the Pradhan Mantri Awas Yojana (Urban), or PMAY-U, for the urban demography and the Pradhan Mantri Awas Yojana (Gramin), also known as PMAY-G or PMAY-R, for the rural demography.

The Government has listed down some basic eligibility criteria for a home loan under PMAY:

  • The beneficiary should be 21 to 60 years of age (if salaried) OR 21 to 70 years of age (if self-employed)
  • Beneficiary income should be in the range of:
    • Economically Weaker Section (EWS) — Annual income of less than Rs. 3 lakhs
    • Lower Income Group (LIG) — Annual income between Rs. 3 and 6 lakhs
    • Middle Income Group-I (MIG-I) — Annual income ranging between Rs. 6 and 12 lakhs
    • Middle Income Group-II (MIG-II) — Annual income ranging between Rs. 12 and 18 lakhs
  • It should be the first property of the beneficiary and he/she must not own any other property
  • Woman of the household should be the owner or co-owner of the property — mandatory for EWS | LIG consumers but not mandatory for MIG I | MIG II consumersIt’s important to keep in mind that PMAY can help reduce EMIs due to interest subsidies. Here’s a snapshot of the same:
Amounts in INR EWS LIG MIG – I MIG – II
Minimum monthly HH Income 5,001 25,001 50,001 1,00,001
Annual HH Income Range Upto 3 lakh 3 lakh to

6 lakh

6 lakh to

12 lakh

12 lakh to

18 lakh

Minimum Loan Amount 50000 (excluding insurance)
Maximum Loan Amount (Including Insurance) 25 lakh 90 lakh 140 lakh
Loan Amount for Subsidy — given on EMIs Interest subsidy of 6.5% for 20 years on loan amount upto 6 lakh Interest subsidy of 4% for 20 years on loan amount upto 9 lakh Interest subsidy of 3% for 20 years on loan amount upto 12 lakh
Maximum Subsidy Allowed 2.67 lakh 2.35 lakh 2.30 lakh
Maximum Loan Tenure 360 months
Purpose Purchase/Self Construction

HH = Household

PMAY can help families plan their finances better while buying a house. That’s not all, they also save on the payment of their home loan EMIs through this scheme.


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