What is the Credit Linked Subsidy Scheme interest rate?

The Credit Linked Subsidy Scheme (CLSS) under PMAY provides interest subsidies at rates ranging from 3% to 6.5% depending on the income category of the borrower. The subsidy is calculated on the Net Present Value (NPV) basis and credited upfront to the loan account, reducing the principal outstanding.

CLSS Interest Subsidy Rates by Category

• EWS (up to ₹3 lakh income): 6.5% subsidy on loans up to ₹6 lakh.
• LIG (₹3–6 lakh income): 6.5% subsidy on loans up to ₹6 lakh.
• MIG-I (₹6–12 lakh income): 4% subsidy on loans up to ₹9 lakh.
• MIG-II (₹12–18 lakh income): 3% subsidy on loans up to ₹12 lakh.

How the Subsidy Amount is Calculated

• The subsidy is not paid monthly — it is calculated as the Net Present Value (NPV) of the interest savings over the loan tenure (20 years).
• EWS/LIG maximum NPV subsidy: approximately ₹2.67 lakh.
• MIG-I maximum NPV subsidy: approximately ₹2.35 lakh.
• MIG-II maximum NPV subsidy: approximately ₹2.30 lakh.

How It Reduces Your EMI

• The lump-sum NPV subsidy is credited to the loan account, reducing outstanding principal.
• EMI is then recalculated on the reduced balance.
• For a ₹6 lakh loan at 8.5% (EWS), EMI could reduce by approximately ₹2,000–₹2,500/month.

The CLSS interest subsidy is one of the most financially impactful government benefits available to home loan borrowers. Eligible applicants should confirm their category, apply through a CLSS-empanelled lender, and ensure the property meets the carpet area requirements.