What is a Subvention Scheme?
- The word “Subvention” means “granting of money, especially by government”. In real estate the term “subvention” is used in a different context, however.
- Here when you decide to buy a home, you can book it by paying an initial payment & the bank pays the entire loan amount to the developer upfront.
- If you buy a home under this scheme you will own a house without having to pay any interest till a stipulated time period or possession.
- The scheme is also known as 20:80 scheme as the buyer only has to pay 20% as the total cost initially.
Subvention Scheme Advantages:
- You will not be burdened by the EMIs during the construction period.
- Here you do not pay EMI till possession, so here the money that would have gone in an EMI can be saved and put elsewhere as support investment.
- You can also reap benefits of the price appreciation while you don’t pay the EMI.
- If the buyer or the investor is staying in a rented accommodation then there will be no monetary pressure of paying both EMIs and house rent.