Pay 1% less on home loans worth Rs 15 Lakh

Large interest rates on home loan are causes of low housing demand as result of declining profit curve. But now an individual borrower, who wants to take a home loan up to Rs. 15 lakh, will have to receive 1% interest subsidy approved by the Union cabinet on Tuesday, without exceeding cost of the house Rs. 25 lakh.

The move in this fiscal to offer 1% rate waiver extend to one year up to Rs. 15lakh loan under the scheme of the home loan subsidy will likely to help in raising housing demand, but will cost the exchequer Rs 400 crore.

“When interest rates have risen, even a one per cent relief is a relief for the middle and lower middle classes,” home minister P. Chidambaram told reporters.

Interacting with media on yesterday, he announced the Cabinet decision to give exemption on subsidy limit for a person that will be Rs. 14,912 for a loan of Rs. 15 lakh and Rs. 9,925 for a loan of Rs. 10 lakh.

This recent move of government would definitely prove a gift for several individuals who want to borrow loans “now will get the benefit of one per cent interest subvention”.

Source said, in addition government has also approved a proposal to reimburse the freight on the distribution of decontrolled phosphatic and potassic (P&K) fertilizers in this fiscal provided.

The borrowers of house loans will get this 1% benefited interest subsidy from this fiscal year of 2012-13.