PM’s PMAY scheme to come to the rescue of low income groups

The current interest rate on home loans is 9 percent. For loans taken upto 9 lakhs, a 4 percent interest subsidy will considerably bring down the interest rate to 5 percent, thus helping people save substantially on their EMIs.

For eg: If a person takes a 9 lakh rupees loan for a period of 15 years, under the PMAY, the EMI rate will drop down from 9,128 to 7,114, helping him save Rs. 2011 every month. Similarly, an individual opting for a loan of upto Rs 12 lakh will save Rs. 2,044 on EMI due to the 3 percent reduced interest rate.

Further to the benefits of PMAY, loans taken of upto 2 lakhs, in rural areas, would be given an interest subvention of 3%. The loaned amount could be used to purchase a new house or in the building and expansion of existing homes.

This new scheme by the PM has been received warmly by banks and housing finance companies. The Government has conveniently helped reduce the EMI cost against the cost of rents. This move is definitely a great decision to motivate people to invest in their own homes and a direct step to realise the dream of ‘Housing for All’ objective, as envisioned for 2022. It will bring a lot of families from the Economically Weaker Sections (EWS) and Lower Income Group (LIG) under the purview of this scheme, thus propelling them to move from rented homes into their own.

Apart from this move, the government has also planned to increase the number of homes to be built in the semi-urban areas by 33 percent. This will help expand the circumference of all the eight metro cities. Localities like Bhiwandi, Nimrana, Daruhera on the outskirts of cities like Mumbai, Pune, Ahmedabad, Bangalaore, will see a surge in the demand for housing, where the average price of homes falls anywhere between Rs. 10 and 12 lakh. 

The proposal has brought great relief to those who always wanted to invest in their dream homes but were boggled down by preposterously high interest rates.