How the PMAY Subsidy Calculator Works
Enter your household income, the property value, your home loan amount, the interest rate and the loan tenure.
The calculator checks the scheme limits: household income up to ₹9 lakh a year (EWS, LIG or MIG), property value up to ₹35 lakh, loan up to ₹25 lakh and a loan tenure of more than 5 years.
If you qualify, the 4% subsidy applies to the first ₹8 lakh of the loan for up to 12 years, which is worth ₹1.80 lakh at most. A smaller loan or a shorter tenure reduces the subsidy in the same proportion. The subsidy is released in five equal yearly instalments and credited to your loan account through your lender.
Benefits of the PMAY interest subsidy
- Lower borrowing cost: a 4% subsidy on the first ₹8 lakh of the loan can save up to ₹1.80 lakh.
- Wide income range: families with a household income up to ₹9 lakh a year can qualify, across the EWS, LIG and MIG groups.
- Larger loans allowed: loans up to ₹25 lakh on a home worth up to ₹35 lakh are eligible, although the subsidy applies only to the first ₹8 lakh.
- Paid through your lender: the subsidy is credited to your home loan account, which reduces your outstanding loan.
- Open to buying, re-buying and building: the scheme covers loans to buy or build a house, subject to the scheme guidelines.
Formula Used
The calculator estimates the subsidy by scaling the maximum ₹1.80 lakh to your loan and tenure:
Subsidy = ₹1,80,000 × (Subsidised Loan ÷ ₹8,00,000) × (Subsidised Years ÷ 12) | Yearly Instalment = Subsidy ÷ 5- Subsidised LoanThe lower of your loan amount and ₹8,00,000
- Subsidised YearsThe lower of your loan tenure and 12 years
- Yearly InstalmentThe subsidy is released in five equal yearly instalments
Example Calculation
Suppose a family with a household income of ₹5,00,000 buys a ₹30,00,000 home with a ₹20,00,000 loan at 8.5% for 20 years.
- Household Income₹5,00,000 (LIG)
- Property Value₹30,00,000
- Loan Amount₹20,00,000
- Interest Rate8.5% per year
- Loan Tenure20 years
- Eligible. Subsidy = ₹1,80,000 in 5 yearly instalments of ₹36,000. EMI = ₹17,356, Total Interest = ₹21,65,552, Interest After Subsidy ≈ ₹19,85,552
Important Assumptions
- The calculator follows the PMAY-U 2.0 Interest Subsidy Scheme for loans sanctioned and disbursed on or after 1 September 2024. The scheme runs until 31 August 2029 and the government can change it, so confirm the current rules with your lender and the official PMAY-Urban portal.
- ₹1.80 lakh is the maximum subsidy under the scheme. It applies in full to an eligible loan of ₹8 lakh or more with a tenure of 12 years or more. For a smaller loan or a shorter tenure we reduce it in proportion as a rough estimate, so your lender's figure may be different.
- Each yearly instalment is released only if your loan account is still active and more than 50% of the principal is outstanding at that time.
- The calculator cannot check every condition. Your family must not own a pucca house anywhere in India, must not have received a government housing benefit in the last 20 years, and the house must have a carpet area of up to 120 square metres. The subsidy is available only once for a property.
- Interest after subsidy is shown as total interest minus the subsidy, as a simple guide. In practice your lender claims the subsidy, and it is credited to your loan account in yearly instalments, which reduces your principal.
- The EMI uses the standard reducing-balance formula at a fixed rate. Processing fees, insurance and changes in a floating rate are not included.
- This calculator covers PMAY-Urban 2.0 only. PMAY-Gramin (rural) works differently.