People earning less than Rs 6 lakh per annum will get a subsidy of 6.

5 percentage points on a
principal component of Rs 6 lakh, regardless of their total loan amount. If they borrowed money
at nine per cent interest, they will pay only 2.5 per cent interest on Rs 6 lakh, and nine per cent
on the remainder.

In the second bracket, those earning up to Rs 12 lakh per annum will receive an interest subsidy
of four percentage points on a principal component of Rs 9 lakh. Under the highest interest
category of Rs 18 lakh per annum, home-buyers can avail a subsidy of three percentage points on
a principal component of Rs 12 lakh, meaning your first house will cost about Rs 2.4 lakh less if
you earn Rs 18 lakh a year.

The net benefit to all three categories is around Rs 2.4 lakh (assuming an interest rate of 9 per
cent), while monthly installments will reduce by approximately Rs 2,200, Times of India reports.

National Housing Bank (NHB) and the Housing and Urban Development Corporation (HUDCO)
are the nodal agencies to implement the schemes. The government has subsidised nearly 18,000
first time home-buyers of the low-income group at a cost of almost Rs 310 crore. A senior NHB
official expects the disbursal rate to increase as the middle-income category has now been roped
in.