Odisha lowers home loan interest rate to 8% for government staff

July 13, 2022
Odisha lowers home loan interest rate to 8% for government staff

BHUBANESWAR: The state government on Tuesday hiked the house building advance (HBA) for its employees from Rs 25 lakh to Rs 40 lakh and introduced a flat interest rate of 8% on the same. The move will benefit more than three lakh employees.

Since 2010, the employees were eligible for loans up to Rs 25 lakh. There were different interest rates depending on the loan taken, varying from 6% (for a loan up to Rs 50,000) to 11.5% (for Rs 25 lakh). Now on, the interest rate will remain 8%, irrespective of the loan amount up to the maximum limit of Rs 40 lakh.

All regular government employees are eligible to avail themselves of the loan in two phases in a 60:40 ratio, read a statement issued by the government.

A government official said the state move follows a similar initiative by the Centre of reducing the interest rate to 7.1% and as per the 7th Pay Commission’s recommendations. The Union ministry of housing and urban affairs has set the 7.1% HBA rate for central government employees for loans availed between April 2022 to March 2023.

The official said there is no financial implication on the government as the principal and interest are recovered from the salary of the employees. During the sanctioning of advance, the individual employee’s period in service left and the salary drawn will be factored in so that the advance is recovered from his/her salary and pension.

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