Affordable Housing to Get a Boost as Home Loans to Cost Less
home loan limit for home buyers belonging to economically weaker sections will increase to Rs. 35 lacs from Rs. 28 lacs in metros and from Rs. 20 lacs to Rs. 25 lacs in non-metro cities
On 6 June 2018, Reserve bank of India revised home loan limits for priority sector lending in India. This implies that home loan limit for home buyers belonging to economically weaker sections will increase to Rs. 35 lacs from Rs. 28 lacs in metros and from Rs. 20 lacs to Rs. 25 lacs in non-metro cities.
As per RBI guidelines, bank in India have to lend 40% of all home loans to priority sector lending such as borrowers belonging to economically weaker sections and agricultural sectors etc. RBI’s decision to increase the limit will prompt lenders to focus more on the small-ticket size segment in order to increase their market share.
As per the revised policy of RBI, the home loan limit in non-metro centers will be increased from Rs. 20 lacs to Rs. 25 lacs. However, it should be noted that cost of the dwelling should not exceed Rs. 45 lacs in metro centres and Rs. 30 lacs in non-metro centres.
The decision to increase the limit will give boost to first-time home buyers in the country especially in the affordable housing segment. The move by RBI aligns perfectly with Pradhan Mantri Awas Yojana (PMAY) in which customers belongs to EWS/LIG category can avail CLSS Credit Linked Subsidy of up to Rs. 2.67 lacs*