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PMAY CLSS Calculator – Makes Home Ownership Pocket Friendly

PMAY CLSS3482 views

Home is the buzzword these days, isn’t it? From the heaven of falling interest rates greatly aided by demonetization to the mega announcement of Pradhan Mantri Awas Yojana Scheme (PMAY), the decks are getting increasingly cleared to buy an ‘Aashiana’, a term which we proudly refer to a home. If we talk about PMAY, it has made a ‘Dhamaka’ ever since credit linked interest subsidy (CLSS) is associated with the former. CLSS, a term which you could see prominently in the financial newspapers, is set to greet those looking to buy or construct their first home in India on a home loan. So, what is CLSS? It is a tool by which a flurry of interest benefits comes to soothe your pocket against the day-to-day inflation.

Earlier, the carpet size for MIG I was 120 sq mts. and for MIG II it was 150 sq. mts. Now, the carpet size of these houses under PMAY MIG have increased by 2, 100 sq. ft. The new carpet size for MIG I is 160 sq. mts. and for MIG II it is 200 sq. mts. It is beneficial mainly to those living in Tier – 3 and Tier – 4 cities.

Beneficiaries of PMAY CLSS Scheme

The PMAY CLSS Scheme is applicable to four segments of the population, categorised as Economically Weaker Section (EWS), Low Income Group (LIG), Middle Income Group (MIG)-I and Middle Income Group (MIG)-II. The subsidy is applicable to a home loan having a maximum tenure of 20 years across the segments.

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CLSS Benefit for EWS

The interest subsidy for EWS with a yearly income of upto ₹3 lakhs is kept at 6.50% for a loan of upto ₹6 lakhs. So, the rate of interest for ₹6 lakhs will be 6.5% minus from the normal rate. Above ₹6 lakhs, the normal interest rate of the bank or any other financial institution offering a home loan under PMAY scheme would be applicable. The home to be bought and constructed must have a carpet area of 30 square meters.

Table Showing Saving for EWS on a Home Loan of ₹10 lakhs as Per PMAY CLSS (Assuming 8.80% as Normal Rate of Interest)

Loan Amount (In ₹) (A)10,00,000
EMI Without Subsidy (In ₹)8,869
Interest Payable Without Subsidy (In ₹)11,28,569
Total Amount Payable Without Subsidy (In ₹) (C)21,28,569
Interest Subsidy Amount (In ₹) (B)2,67,000
Balance Loan Amount (In ₹) (A-B)7,33,000
EMI After Subsidy (In ₹)6,501
Interest Outgo After Availing Subsidy Benefits (In ₹)8,27,241
Total Amount Payable After Subsidy (In ₹) (D)15,60,241
Total Savings (In ₹) (C-D)5,68,328

CLSS Benefit for LIG

The LIG segment, with an annual income of upto ₹6 lakhs, would be eligible for a subsidy of 6.5% for a 6 lakh loan. Interest rate on the same amount will be derived by subtracting 6.5% from the normal rate. Above the said home loan amount, the normal rate will apply. The carpet area of homes to be bought or constructed is kept at 60 square meters for LIG.

Table Showing Saving for LIG on a Loan of ₹25 Lakhs with PMAY CLSS (Assuming 8.80% as Normal Interest Rate)

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Loan Amount (In ₹) (A)25,00,000
EMI Without Subsidy (In ₹)22,173
Interest Payable Without Subsidy (In ₹)28,21,422
Total Amount Payable Without Subsidy (In ₹) (C)53,21,422
Interest Subsidy Amount (In ₹) (B)2,67,000
Balance Loan Amount (In ₹) (A-B)22,33,000
EMI After Subsidy (In ₹)19,805
Interest Outgo After Availing Subsidy Benefits (In ₹)25,20,094
Total Amount Payable After Subsidy (In ₹) (D)47,53,094
Total Savings (In ₹) (C-D)5,68,328

CLSS Benefit for MIG-I

The first part of the middle income group under PMAY includes a segment of the population earning upto ₹12 lakhs a year. The beneficiaries of this group can avail 4% interest subsidy on a home loan of upto ₹9 lakhs. Above this, the normal interest rate will be applicable. The interest rate, here, will get lowered by 4% from the normal one. A carpet size of 120 square meters has now increased to 160 square meters sought in a home to be bought or constructed.

Table Showing Saving for MIG-I on a Loan of ₹40 Lakhs with PMAY CLSS (Assuming 8.85% as Normal Interest Rate)

Loan Amount (In ₹) (A)40,00,000
EMI Without Subsidy (In ₹)35,604
Interest Payable Without Subsidy (In ₹)45,44,975
Total Amount Payable Without Subsidy (In ₹) (C)85,44,975
Interest Subsidy Amount (In ₹) (B)2,35,000
Balance Loan Amount (In ₹) (A-B)37,65,000
EMI After Subsidy (In ₹)33,512
Interest Outgo After Availing Subsidy Benefits (In ₹)42,77,958
Total Amount Payable After Subsidy (In ₹) (D)80,42,958
Total Savings (In ₹) (C-D)5,02,017

CLSS Benefit for MIG-II

The second part of the middle-income group keeps under its umbrella the people falling in the yearly income bracket of up to ₹18 lakhs. So, if you belong to this category, a 3% interest subsidy on a loan of up to ₹12 lakhs would be applicable. The loan exceeding the said amount would be serviced at the normal rate of interest. The carpet area for homes for buy and construction is now 200 square meters from existing 150 square meters.

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Table Showing Saving for MIG-II on a Loan of ₹40 Lakhs with PMAY CLSS (Assuming 8.90% as Normal Interest Rate)

Loan Amount (In ₹) (A)40,00,000
EMI Without Subsidy (In ₹)35,732
Interest Payable Without Subsidy (In ₹)45,75,725
Total Amount Payable Without Subsidy (In ₹) (C)85,75,725
Interest Subsidy Amount (In ₹) (B)2,30,000
Balance Loan Amount (In ₹) (A-B)37,70,000
EMI After Subsidy (In ₹)33,678
Interest Outgo After Availing Subsidy Benefits (In ₹)43,12,621
Total Amount Payable After Subsidy (In ₹) (D)80,82,621
Total Savings (In ₹) (C-D)4,93,104

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Personal Loan Interest Rates July 2019
Bajaj Finserv10.99% - 16.00%
Fullerton India14.00% - 33.00%
HDFC Bank11.25% - 21.50%
ICICI Bank10.99% - 18.40%
IndusInd Bank10.99% - 16.00%
Kotak Bank10.99% - 20.99%
RBL13.00% - 18.00%
Standard Chartered Bank11.50% - 18.00%
Tata Capital10.99% - 18.00%
Home Loan Interest Rates July 2019
State Bank of India/SBI8.50% - 9.20%
HDFC8.55% - 9.55%
LIC Housing8.60% - 9.15%
PNB Housing Finance9.05% - 12.00%
Piramal Capital & Housing Finance9.00% - 9.10%
Tata Capital9.20% - 9.35%
ICICI Bank9.05% - 9.30%
Bank of Baroda8.70% - 9.70%
Axis Bank8.85% - 9.10%
Citibank9.00% - 9.85%
Indiabulls Housing Finance Limited8.80% - 11.05%
Kotak Bank8.90% - 8.75%
DHFL9.05% - 9.95%
Reliance Home Finance8.75% - 14.00%