Home Loan
Loans & CreditA home loan is a secured loan taken to purchase, construct, or renovate residential property. Typically India's largest financial commitment for families -- tenures up to 30 years, amounts up to Rs 5-10 crore for metro properties.
In detail
LTV: up to 90% for loans below Rs 30L, 80% for Rs 30-75L, 75% above Rs 75L. Tax benefits: Section 24 (Rs 2L interest deduction), Section 80C (Rs 1.5L principal). PMAY subsidy provides upfront interest subsidy of Rs 2.35L to Rs 6.5L for eligible buyers.
Formula
Annual tax benefit (30% bracket):
Section 24 interest: Rs 2L x 30% = Rs 60,000
Section 80C principal: Rs 1.5L x 30% = Rs 45,000
Total annual saving: Rs 1,05,000
Real-life example
🇮🇳 India example
Amit buys Rs 60L flat, Rs 48L home loan at 8.75% for 20 years. EMI Rs 42,580. After Rs 5,000/month tax benefit, effective EMI = Rs 37,580.
Frequently asked questions
What is PMAY subsidy? ▼
PMAY provides upfront interest subsidy for first-time buyers. EWS/LIG (income up to Rs 6L): 6.5% on Rs 6L = Rs 2.67L subsidy. MIG-I (Rs 6-12L): 4% on Rs 9L = Rs 2.35L. Credited upfront to loan account reducing EMI.