The Interest Subsidy Scheme (ISS) is part of the Pradhan Mantri Awas Yojana Urban 2.0 (PMAY-U 2.0). It helps eligible home buyers save money on their home loans. Under this scheme, the government provides a subsidy on home loan interest, reducing EMIs and making home ownership easier. Eligible beneficiaries get a subsidy of around 3% to 6.5% on home loans.
How Interest Subsidy Works under PMAY-U 2.0?
The government gives interest subsidies to households in the EWS (Economically Weaker Section), LIG (Low Income Group), and MIG (Middle Income Group) categories. Families with annual income up to Rs. 3 lakh, Rs. 6 lakh, and Rs. 9 lakh are eligible.
Eligible beneficiaries can get a maximum interest subsidy of Rs. 1.80 lakh.
The subsidy is calculated on the first Rs. 8 lakh of the home loan.
If the loan tenure exceeds 5 years, the Net Present Value (NPV) of the subsidy is Rs. 1.50 lakh.
The subsidy is released in five-yearly instalments directly into the borrower’s account through DBT, provided the loan is active, and more than 50% of the principal is outstanding.
The lender deducts the subsidy upfront from the principal, and the borrower pays EMI on the remaining amount.
Applicants must submit a self-certificate or affidavit to prove their income. This scheme applies only to urban households that do not already own a pucca house anywhere in India. The maximum house area under this scheme is 120 square meters. Geo-tagging of the house is also required.
Ultimately, the PMAY Interest Subsidy Scheme helps eligible families reduce their home loan burden. By providing up to Rs. 1.80 lakh as subsidy, the scheme encourages more people to buy or build homes in urban areas. It ensures financial relief and easier access to housing. Hope you get an idea of what is interest subsidy under PMAY.
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What is Interest Subsidy Under PMAY?
Sivaji66
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2026-02-03T18:08:29+00:00 2026-02-03T18:18:49+00:00Comment
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