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Govt Triples Home Loan Limit to Rs 25 lakh

Published on November 11, 2017
The government of India has raised the maximum amount limit for home loans for government employees.

  • The central government employee can borrow Rs 25 lakh from the government to construction/purchase of new house/flat.
  • Earlier this limit was only Rs 7.50 lakh.
  • The move is going to benefit about 50 lakh central government employees across the country.

Features of the new House Building Advance (HBA) rules

  • The employee can up to borrow 34 months of the basic pay subject to a maximum of Rs 25 lakh, or cost of the house/flat, or the amount according to repaying capacity, whichever is the least for new construction/purchase of new house/flat. 
  • HBA amount for expansion of the house has been revised to a maximum of Rs 10 lakh or 34 months of basic pay or cost of the expansion of the house or amount according to repaying capacity, whichever is least. This amount was earlier Rs.1.80 lakh.
  • The cost ceiling limit of the house which an employee can construct/ purchase has been revised to Rs 1.00 crore 
  • Both spouses, if they are central government employees, are now eligible to take HBA either jointly, or separately. 
  • he rate of Interest on Housing Building Advance shall be at only one rate of 8.50% at simple interest (in place of the earlier four slabs of  bearing interest rates ranging from 6% to 9.50% for different slabs of HBA which ranged from Rs.50,000/- to Rs.7,50,000/-) . This rate of interest shall be reviewed every three years.  
  • The clause of adding a higher rate of interest at 2.5% (two point five percent) above the prescribed rate during sanction of House Building Advance stands withdrawn. 

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