SBI Scheme of 1% interest subvention of Housing loans
The Union Finance Minister during the Budget for 2009-10, had announced a Scheme of 1 per cent Interest Subvention in respect of individual housing loans upto Rs.10 lakh, provided the cost of unit does not exceed Rs.20 lakh. The validity period for the scheme is 1st Oct 2009 to 31st March 2011.
Read More – SBI Home Loan Interest Rates & Apply
The Important features of the scheme are as under:
| Purpose | The objective of the Scheme is to provide interest subsidy on housing loan as a measure to generate additional demand for credit and to improve affordability of housing to eligible borrowers in the middle & lower income groups. The Scheme is expected to provide relief to prospective home owners and improve home ownership in the specified target segment. |
| Duration of the Scheme | The Scheme will be in operation from October 01, 2009 to March 31, 2013. |
| Eligibility for application under the scheme | Loan sanctioned on or after 01.10.2009 to 31.03.2011:
Interest subvention of 1 percent will be available on housing loans upto Rs. 10 lakh to individuals for construction/purchase of a new house or extension of an existing house, provided the cost of construction/price of the new house/extension does not exceed Rs. 20 lakh. Loan sanctioned on or after 01.4.2011 to 31.03.2013 Interest subvention of 1 percent will be available on housing loans upto Rs. 15 lakh to individuals for construction/purchase of a new house or extension of an existing house, provided the cost of construction/price of the new house/extension does not exceed Rs. 25 lakh. All such loans sanctioned and disbursed, during the period of one year shall be eligible for the said interest subsidy.
|
| Interest Subsidy | Subsidy of 1 per cent will be defined as reduction in interest rate by 100 basis points per annum from the existing rate of interest for a particular amount & tenor.It will be applicable to the first twelve installments of all such loans sanctioned and disbursed during the currency of the Scheme and will be computed for 12 months on the disbursed amount. The subsidy amount will be adjusted upfront in the principal outstanding, irrespective of whether the loan is on fixed or floating rate basis. |
| Nodal Agency | Reserve Bank of India |
| Interest application | Interest will be applied to the borrower’s account at the bank’s rate of interest on daily outstanding loan balance at monthly rests. |
| Repayment | Borrower will repay the loan by way of Equated Monthly Installments (EMIs). |
| Primary security | Mortgage of the dwelling unit. |
| Other conditions | Other eligibility criteria e.g. Age, No. of borrowers, EMI/NMI ratio, Processing fee, Loan Term, Interest rate, pre-closure penalty etc. would be the same as in case of Home Loan scheme of the bank under which the loan is sanctioned.
Following cases are Ineligible for subsidy amount Housing loans extended to (i) Non Resident Indians (NRIs), |
| Sunset clause | The scheme will be open for sanction upto and including 31st March 2013. |
