In the wake of large scale criticism and the realtors’ protest against repo rate hike, the Government raised the housing loan ceiling for availing one per cent interest subsidy to Rs.15 lakh from existing Rs.10 lakh, a decision that will benefit borrowers by up to Rs.14,865 per annum. The proposal was approved by the Union Cabinet.
Under a scheme introduced in 2009, home loan borrowers are getting one per cent interest subsidy on home loans of up to Rs.10 lakh, provided the cost of the house did not exceed Rs.20 lakh.
“A budgetary provision of Rs.500 crore has been made for the financial year 2011-12 for implementing the scheme,’’ Minister of State for Information and Broadcasting, Ambika Soni told reporters after the Cabinet meeting.
With the increase in housing loan ceiling, the limit of subsidy for an individual borrower would go up to Rs. 14,865 per year for a loan of Rs. 15 lakh on reducing balance basis from the present limit of Rs. 9,910 for a loan of Rs 10 lakh, Soni said.
The Government has designated the National Housing Bank as the nodal agency for implementing the scheme both for scheduled commercial banks and housing finance companies, she added.
