26 February 2020
Home / Business Productivity & Finance / Pradhan Mantri Awas Yojana Could Help You Buy Your Dream Home: Find Out How

Pradhan Mantri Awas Yojana Could Help You Buy Your Dream Home: Find Out How

Pradhan-Mantri-Awas-Yojana-PMAY

Pradhan Mantri Awas Yojana (PMAY) is a comprehensive and progressive mission, launched in India. The scheme is an initiative by the Government of India which aims at providing affordable housing for the economically weaker classes by the year 2022.

The following are eligible for the scheme:

#1. Economically Weaker Section (EWS) – Families with an annual income up to Rs. 3 Lakh are eligible for the PMAY scheme.

#2. Low Income Group (LIG) – Families with an annual income between Rs. 3 Lakh and Rs. 6 Lakh can avail the benefits of the affordable housing scheme.

#3. Middle Income Group I (MIG I) – Families within an annual income between Rs. 6 Lakh and Rs. 12 Lakh are eligible.

#4. Middle Income Group II (MIG II) – Families with an annual income between Rs. 6 Lakh and Rs. 12 Lakh.

#5. Women belonging to EWS and LIG categories can avail all the benefits of the scheme.

#6. Scheduled Caste (SC), Scheduled Tribe (ST) and Other Backward Class (OBC).

Read – Budgeting Basics: How to Set Goals for your Budget

You’re not eligible for the PMAY scheme if…

1. If your family has already availed of central assistance under any housing loan scheme in the past.

2. You already own a house in your name or in the name of a family member in India.

3. Your spouse claims interest on subsidy for a house.

What does the PMAY scheme offer?

Particulars Middle Income Group I Middle Income Group II
Annual Household Income 6-12 lakh 12-18 Lakh
Interest Subsidy 4% 3%
Eligible Loan Tenure for a Subsidy 20years 20years
Eligible Loan Amount for a Subsidy 9 Lakh 12 Lakh
Maximum Carpet Area In Sq Metres 90 sq. m.  110 sq. m.
Maximum Carpet Area In Sq Ft 968.5 sq. ft. 1,184 sq. ft.
The Discount rate for Net Present Value (NPV) Calculation of interest subsidy (%) 9% 9%

Impact under MIG I

Borrowers get an interest subsidy of 4%

Annual income: Rs 7 lakh per annum

Example A B C
Loan Amount (Rs) 6 Lakh 9 Lakh 12 Lakh
Loan Amount eligible for a subsidy 6,00,000 9,00,000   9,00,000  
Interest subsidy (Rs) 1,56,712 2,35,068 2,35,068
Balance Loan (Rs) 4,43,288 6,64,932 9,64,932
Normal EMI @ 8.5% 5,207 7,810 10,414
Reduced EMI after subsidy 3,847 5,770 8,374
Monthly savings due to subsidy 1,360 2,040 2,040
Annual savings 16,320 24,480 24,480
Total savings over the loan tenure (Rs) 3.26 Lakh 4.89 lakh 4.89 Lakh

All figures are in Rs. For tenures of over 20 years, tenure of 20 years has been considered for the purpose of calculation of interest rate subsidy.

Pradhan Mantri Awas Yojana

Impact under MIG II

Borrowers get an interest subsidy of 3%

Annual income: Rs 14 lakh per annum

Example I II III
Loan Amount (Rs) 9 Lakh 12 Lakh 15 Lakh
Loan Amount eligible for subsidy 9,00,000 12,00,000   12,00,000  
Interest subsidy (Rs) 1,72,617 2,30,156 2,30,156
Balance Loan (Rs) 7,27,383 9,69,844 12,69,844
Normal EMI @ 8.5% 7,810 10,414 13,017
Reduced EMI after subsidy 6,312 8,417 11,020
Monthly savings due to subsidy 1,498 1,997 1,997
Annual savings 19,796 23,968 23,968
Total savings over the loan tenure (Rs) 3.59 Lakh 4.79 lakh 4.79 lakh

Online application for Pradhan Mantri Awas Yojana

The online application process to apply for a PMAY scheme is very simple and convenient.

  • For PMAY you can apply online from their official website http://pmaymis.gov.in/
  • Enter your personal details and your bank account details
  • If you’re eligible for a subsidy, your application will then be forwarded to the Central Nodal Agency (CNA)
  • Once  approved, the subsidy amount will be credited to your account
  • With a home loan EMI calculator, you can get the exact amount you need to shell out every month towards your home loan

Before you fill the application, make sure that your name is listed in the beneficiary list and you’re eligible to apply for the PMAY scheme.

This scheme makes the home loan affordable as the subsidy provided on the interest component reduces the outflow on the home loan. Pradhan Mantri Awaz Yojana scheme has made it easier for all the lower economical classes to be able to afford a home and turn their dreams into reality.

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Gaurav Jain
Article by Gaurav Jain
Hey There! My name is Gaurav Jain, a full time affiliate marketer since 2007. The reason for starting eMoneyIndeed.Com blog is to help you Save & Make Money Online. I write about Blogging, Online Marketing, Webhosting, SEO, Affiliate Marketing, Startups, Social Media, Email Marketing and more. Hope you enjoy the posts on eMoneyIndeed.com

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