Central government employees can now take advance upto Rs 25 lakhs for construction or purchase of house at a simple interest rate of 8.50 per cent, a move aimed at giving fillip to the housing sector, an official release said.
Earlier, the maximum borrowing limit was Rs 7.50 lakh with interest rate slabs ranging from 6 per cent to 9.50 per cent.
A senior official in the Housing and Urban Affairs Ministry said that around Rs 11 lakh could be saved by availing House Building Advance (HBA) as compared to borrowing from lending institutions on a Rs 25-lakh loan for 20-years period.
“The total money that have to paid comes to around Rs 40.84 lakh, including interest component of Rs 15.84 lakh.”
The Housing and Urban Affairs Ministry makes rules for HBA for central government employees from time to time.
“Employee can borrow upto 34 months of the basic pay subject to a maximum of Rs 25 lakhs, 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,” the release said, quoting the revised HBA rules.