7th Pay Commission Latest News: The Central Government has reduced the interest rate by 80 basis points i.e. 0.8 percent for the advance given to the employees for building a house, buying a house or flat or repaying the home loan taken from the banks.
7th Pay Commission/HBA Interest Rates: There is relief news for central employees. The Central Government has reduced the interest rate of Home Loan i.e. Building Advance (HBA) taken from banks to make houses for its employees.
The central government has reduced the interest rate of house building loan from 7.9 percent to 7.1 percent. The government has given information about this by issuing an office memorandum.
Central employees got big relief
In fact, the central government has cut the interest rate of advances given to employees for building a house, buying a house or flat or repaying home loans taken from banks by 80 basis points, or 0.8 percent. This deduction has been made from April 1, 2022 to March 31, 2023. That is, now the dream of building houses for central employees can be realized more easily.
Advance will be available at the rate of 7.1 percent
After this announcement of the government, now employees can take advance at 7.1 percent interest rate till March 31, 2023. Let us tell you that earlier this rate was 7.9 percent annually. The Ministry of Housing and Urban Affairs has issued an office memorandum and informed about the reduction in the interest rates of advance.
How much advance can I take?
Under this special facility given by the government, central government employees can take an advance of up to 34 months or up to a maximum of Rs 25 lakh according to their basic salary. Also, from the cost of the house or its ability to pay, whichever is less for the employees, that amount can be taken as advance.
Advance for house construction at affordable rates
According to the recommendations of the 7th Pay Commission and HBA (House Building Advance) rules, central government employees for construction of a new house or purchase of a new house-flat for 34 months basic salary, maximum Rs 25 lakh or the cost of the house Or you can take advance of the amount whichever is less from the ability to repay the advance. Till now, simple interest was charged on this advance at the rate of 7.9 percent, which will now come down to 7.1. Temporary employees with continuous service of 5 years can also take advantage of this facility.
What is HBA?
The Central Government gives House Building Advance to its employees. In this, the employee can take advance to build a house on his own or his wife’s plot. This scheme was started from 1 October 2020 and under this, till 31 March 2023, the central government gives house building advance to its employees at the rate of 7.1% interest.
Advance for house extension
According to the rules of House Building Advance, for the extension of the house, central employees can take an advance of a maximum of Rs 10 lakh or basic salary of 34 months, the cost of expansion of the house or the ability to pay the advance, whichever is less. The amount taken in advance will be recovered as principal for the first 15 years or 180 months. In the remaining five years i.e. 60 months, it will have to be returned in EMI as interest. Advance will also be available at the rate of 7.1%.
Bank’s home loan can be paid by taking advance
If the employee has taken a home loan from the bank for building a new house, taking a flat, then it can be repaid by taking an advance. This advance will be available to permanent as well as temporary employees. But the job of temporary employees should be for five consecutive years. Employees will get house building advance from the day they have taken loan from banks and other financial institutions. Even if you have applied for advance for building a house earlier, but this amount will be available from the day you were given the loan. Advance for bank-repayment will be given in lump sum. However, the employees will have to submit the HBA Utilization Certificate within one month from the date of issuance of advance.
