Government extended by one year the 1% interest subsidy scheme on housing loans of up to Rs 15 Lac, where the cost of the house does not exceed Rs 25 Lac.
When interest rates have risen, even 1% relief is a relief for the middle class and lower middle class. The limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 Lac, and Rs 9,925 for a loan of Rs 10 Lac. The extended scheme will benefit all home loans availed in the current financial year.
Chidambaram said a large number of people have benefited from the 1% interest subvention and “whoever borrows now will get the benefit of one per cent”.
A budgetary provision of Rs 400 crore has been made for the financial year 2012-13 for implementing the scheme. The National Housing Bank (NHB) is the nodal agency for implementing the scheme both for banks and housing finance companies.
Earlier, the interest benefit was given on loans of up to Rs 10 Lac provided the cost of house did not exceed Rs 20 Lac. In 2011-12, the government liberalised the scheme and increased the loan limit to Rs 15 Lac and the cost of house to Rs 25 Lac.