Indialends, 26 Mar 2026

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Subsidy on Home Loans by the Government

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The Indian Government has launched the ‘Pradhan Mantri Awas Yojana – Housing for All’ scheme in 2015 to provide affordable housing to all. Under the scheme, home loan interest subsidy can be availed by individuals if they meet the eligibility criteria. The interest subsidy is provided under the Credit Linked Subsidy Scheme (CLSS).

What is Credit Linked Subsidy Scheme (CLSS)?

Credit Linked Subsidy Scheme is one of the components under the Pradhan Mantri Awas Yojana (PMAY). The Central Government offers interest subsidy on home loans availed by the applicants who fall under the following mentioned categories:

EWS (Economically Weaker Section)/LIG (Low Income Group)

Under this category, the interest subsidy is offered at a rate of 6.50%. The interest subsidy is offered during the tenure of the loan or for 15 years, whichever is lower. The interest subsidy is provided for loans up to Rs. 6 lakhs with the maximum subsidy amount being Rs. 2.20 lakhs.

Revised EWS (Economically Weaker Section)/LIG (Low Income Group)

Under this scheme, the interest subsidy under revised EWS/LIG is offered at 6.50%. The subsidy is offered for the actual tenure of the home loan or a period of 20 years. The maximum subsidy amount is Rs. 2.67 lakhs. The subsidy can be availed only on those home loans that were approved on or after 1 January 2017.

MIG – I (Middle Income Group 1)

Applicants who fall under this category can avail subsidy at the rate of 4% with the maximum loan amount of Rs. 9 lakhs. The maximum loan term taken into consideration for the calculation of subsidy is 20 years. Under the scheme, the maximum subsidy amount is Rs. 2.35 lakhs.

MIG – II (Middle Income Group 2)

Under MIG – II, the maximum loan amount for subsidy is Rs. 12 lakhs and beneficiaries can avail an interest subsidy of 3%. The maximum subsidy amount that can be availed is Rs. 2.30 Lakhs. The maximum term of loan on which subsidy will be calculated is 20 years.

Eligibility to avail the benefits under PMAY

• The applicant should not own a pucca house in their name or in the name of any other member of the family.
• The applicant must not have availed any financial assistance under any Government housing scheme previously.
• The ownership of the house should either be in the name of the female member of a household or joint ownership with wife (this is applicable only in the case of EWS/LIG and revised EWS/LIG schemes).
• Applicants should not have taken a home loan or availed interest subvention benefit under the scheme.
• Already built houses do not come under the coverage of the scheme.