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Interest rate on house building advance cut to 7.9% for govt employees

According to the the Union Housing and Urban Affairs Ministry, the new interest rate has come into force from October 1.

Press Trust of India  |  New Delhi 

Repo-linked loans: Home buyers to see higher outgo in initial years

The Centre has reduced the interest on House Building Advance from 8.5 per cent to 7.9 per cent for its employees, a move aimed at boosting demand, an official statement stated on Thursday.

According to the the Union and Urban Affairs Ministry, the new interest rate has come into force from October 1.

"The rate of interest on House Building Advance (HBA) has been reduced from existing 8.5 per cent to 7.9 per cent for government employees for a period of one year, irrespective of the loan amount of HBA," the ministry said.

The House Building Advance is admissible to permanent employees and all those temporary employees who have rendered five years of continuous service.

"The ministries/departments are delegated powers to sanction House Building Advance to their employees in accordance with the HBA rules," it stated.

Last month, Union Finance Minister had announced that the interest rate on house building advance would be lowered and linked to the 10-year G-sec yields.

"Government servants contribute to a major component of demand for houses. This will encourage more government servants to buy new houses," she had said.

First Published: Thu, October 03 2019. 20:20 IST
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