Festive season home buying? Explore 5 schemes for home loan savings

Are you planning to purchase your dream home this festive season but facing financial constraints? Experts suggest considering a home loan along with a range of schemes and subsidies designed to make homeownership more affordable during this festival.

Here are some of the options the government has rolled out to help you save on your home loan

Pradhan Mantri Awas Yojana (PMAY): This program offers interest subsidies on home loans for people belonging to economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG). The subsidy amount varies according to the income group and can be as high as 6.5 per cent of the loan amount. This scheme applies to housing loans under Rs 5 million with a 20-year tenure.

Credit Linked Subsidy Scheme (CLSS): Part of the PMAY, CLSS provides interest subsidies on home loans for EWS, LIG, and MIG individuals. The subsidy can go up to 6.5 per cent of the loan amount for a maximum tenure of 20 years.

Stamp Duty and Registration Fee Waiver: Some state governments offer waivers on stamp duty and registration fees during the festive season, reducing the overall cost of home purchases.

Goods and Services Tax (GST) Reduction: The government has lowered the GST rate on under-construction properties. It's been reduced from 12 per cent to 5 per cent for affordable housing and from 18 per cent to 5 per cent for other properties. This cut can effectively reduce the overall property cost and, consequently, the home loan amount.

Interest Subsidy Scheme for Small Urban Housing: The government is planning to allocate Rs 600 billion ($7.2 billion) to provide subsidised loans for small urban housing over the next five years. This scheme will offer an annual interest subsidy ranging from 3 per cent to 6.5 per cent on loans of up to Rs 0.9 million. It is expected to benefit 2.5 million loan applicants in low-income urban areas, although the extent of the subsidised credit will depend on demand for such housing.

"The availability and eligibility criteria for these schemes can vary based on location and other factors. Therefore, it's recommended to verify the details with the relevant authorities or seek advice from a financial advisor before taking advantage of these opportunities," Arpit Suri, CA, Personal Finance expert said.