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

The centre has reduced the interest rate on House Building Advance for central government employees from 8.5 per cent to 7.9 per cent, in a move aimed at giving a fillip to house construction, an official statement stated on Thursday.

The rate of interest on House Building Advance (HBA) has been reduced from existing 8.5 per cent to 7.9 per cent for a period of one year, irrespective of the loan amount of HBA, the union housing and urban affairs ministry stated in a release.
This will be with effect from 1 October 2019, the release added.
HBA is admissible to permanent employees and all those temporary employees also who have rendered 5 years of continuous service.
The ministries/departments are delegated powers to sanction House Building Advance to their employees in accordance with the HBA rules.
The scheme of HBA to central government employees is a welfare measure providing assistance to government employees to construct/acquire house/flats of their own.
Last month, Union Finance Minister Nirmala Sitharaman 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.