PMAY 2.0: Good news for everyone. Buying a home remains a significant challenge for ordinary people. High property prices and high interest rates put a strain on budgets. However, government schemes and new initiatives by banks and housing finance companies are helping first-time homebuyers reduce their EMI burden and choose longer-term loans.
According to experts, first-time homebuyers currently have several options available to them, which not only reduce the initial EMI but also the total cost of the home.
📌 Also Read: Petrol‑Diesel prices in 14 cities on 6 January, how much they?
Direct relief from PMAY 2.0
The most significant source of government support is the Pradhan Mantri Awas Yojana (PMAY) 2.0. Under this scheme, eligible home loan borrowers can receive an interest subsidy of up to Rs 1.80 lakh on loans up to Rs 25 lakh. This subsidy is credited directly to the loan account in the form of annual installments over five years, thereby reducing the outstanding principal and automatically reducing the EMI.
Which income groups will benefit
PMAY 2.0 is specifically designed for specific income groups. The annual income limit for the Economically Weaker Section (EWS) is set at Rs 3 lakh. For the Low Income Group (LIG), the limit is Rs 3 lakh to Rs 6 lakh.
📌 Also Read: You Can Build a Fund of Rs 13 Lakh by Saving Just Rs 4,000 a Month, Know About This Excellent Scheme
The Middle Income Group (MIG) includes families with annual incomes between Rs 6 lakh and Rs 9 lakh. All these groups can benefit from the scheme if other necessary criteria are met. Subsidies and tax benefits also make home loans affordable. Home loan interest can be claimed as a deduction of up to Rs 2 lakh annually under Section 24(b) of the Income Tax Act.
Section 80C also provides a deduction of up to Rs 1.5 lakh on principal repayment. Combining these two benefits significantly reduces the total cost of the loan over time. Lenders are also offering special products for first-time homebuyers. Step-up home loans offer lower EMIs initially and gradually increase as income increases.
📌 Also Read: Credit Card Limit - Want to increase your credit card limit? Understand these 5 important things first
Longer loan tenures, up to 30 years, are now common, making monthly payments easier. Furthermore, lower interest rates for women and limited-term concessions linked to certain government schemes are also available.
What is PMAY-U 2.0?
Pradhan Mantri Awas Yojana-Urban (PMAY-U) 2.0 is a scheme to further the goal of “Housing for All” in urban areas. It launched in April 2022 and will remain in effect until December 2025.
📌 Also Read: Updating Your Mobile Number in Aadhaar card will be Expensive, Know How Much Will have to Pay, Read the Details
It provides financial assistance and interest subsidies for the purchase, construction, or upgrade of a home. The scheme covers the EWS, LIG, and MIG categories and provides relief of up to Rs 1.80 lakh under the Credit Linked Subsidy Scheme (CLSS).
Central assistance of up to Rs 2.50 lakh per house is provided under Affordable Housing in Partnership (AHP) and Beneficiary-Led Construction (BLC). The share of states and union territories is determined by region. For example, some apply a 60:40 formula, while others a 90:10 formula. Many states also provide additional top-up support.
📌 Also Read: Create an Instant e-PAN in Minutes Without Spending a Single Rupee, Learn the Complete Process
What is the application process?
Applications for PMAY-U 2.0 can be made online through the pmaymis.gov.in portal. Applications are also available through authorized banks and housing finance companies. Applications require Aadhaar, income proof, address proof, and a declaration that the applicant does not already own a permanent home. The deadline for applying for this scheme is September 30, 2025.