Rules3 min read · Updated 17 October 2026
PMAY 2.0 home loan interest subsidy: who can get it and how much
What the PMAY-U 2.0 interest subsidy offers on a home loan: the income groups, loan and property limits, how much you can get and how to check if you qualify.
What the subsidy is
The Pradhan Mantri Awas Yojana (Urban) 2.0 supports urban households buying or building a home. One part of it is an interest subsidy on a home loan. The earlier credit-linked subsidy scheme (CLSS) does not apply to loans sanctioned from 1 September 2024, as widely reported.
In plain words: the government pays part of your interest to your lender, which lowers your loan balance, so you pay less.
The limits to check
| Item | Limit reported |
|---|---|
| Subsidy | Up to ₹1.8 lakh |
| Loan amount that gets the subsidy | First ₹8 lakh, at a 4% interest reduction |
| Maximum loan | ₹25 lakh |
| Maximum property value | ₹45 lakh |
| Household income: EWS | Up to ₹3 lakh a year |
| Household income: LIG | Up to ₹6 lakh a year |
| Household income: MIG | Up to ₹9 lakh a year |
These figures come from published summaries of the scheme guidelines. Scheme rules, dates and caps can change, so check the current guidelines.
How you get it
- Check your household income and the property conditions with your lender or on the PMAY-Urban portal.
- Apply for the home loan from a participating bank or housing finance company, and mention the subsidy at the start.
- The lender submits the claim. If it is approved, the subsidy is credited to your loan account and reduces your balance.
Ask your lender whether the credit shortens your tenure or lowers your EMI, and ask for an updated repayment schedule.
What it could be worth
Take a ₹25 lakh loan at 8.5% for 20 years. The EMI is about ₹21,696. If ₹1.8 lakh were credited against the balance and you kept paying the same EMI, the loan would end about 3 years 3 months sooner and cost about ₹6,72,831 less in interest. This is a simple illustration, since the real subsidy is credited as the scheme provides, not necessarily all at once.
If your loan is above the cap
If you need a loan above ₹25 lakh or the home is worth more than ₹45 lakh, the subsidy will not apply. Do not stretch to a cheaper-looking property only to qualify. A larger down payment that brings the loan within the cap can be worth it. See EMI on a ₹25 lakh loan and Can I afford a home?.
Common questions
What is the maximum subsidy under PMAY 2.0?
Up to ₹1.8 lakh, as reported for the interest subsidy component. The exact amount depends on your loan and category.
Who is eligible for the PMAY-U 2.0 interest subsidy?
Urban households within the reported income limits (EWS, LIG, MIG) who meet the property and other conditions. Check the official guidelines for the full list.
Does the subsidy apply to every home loan?
No. It applies to loans within the scheme's loan and property limits, from participating lenders, sanctioned in the scheme period.
Can I claim the subsidy and the tax deduction on interest?
They are separate benefits. Ask a tax adviser how the subsidy affects the interest you can claim.