HBA Interest from 1985 to till date – House Building Advance for Central Government Employees
House Building Advance Interest Rates from 1985 – HBA for Central Government Employees – No Automatic Penal Interest inclusion from 2017
After implementation of 7th Pay Commission recommendations Govt came up revised House building Advance Rules 2017 in which ceiling for Housing loan for Central Government Employees was increased to Rs. 25 lakh and interest Rates rationalised to 8.5% P.A.
The Complete Text of House building Advance Rules 2017 is given in the following previous GConnect Article
Changes made in House Building Advance Rules after implementation of 7th Pay Commission Report
This article discusses about present HBA interest Rate and Slab wise interest rates charged by Govt from Central Government Employees from the year 1985.
House Building Advance Interest:
With effect from 01.04.2017, Interest on House Building Advance has been fixed at Rs.8.5% (Uniform Rate). It is also proivded in the House Building Advance Rule 2017 that interest Rate will be reviewed every three years and the same will be notified in consultation with Mininstry of Finance.
Unlike recovery of principal and interest in the form of equated monthly installments by Banks in the case of Housing Loan obtained from Banks, repayment of House Building Advance obtained by Central Government Employees from the Govt involves recovery of principal alone in installments for a period not exceeding 125 months. Tthe revovery of interest in installments for a period not exceeding 60 months would follow after the employee completed the repayment of House Building Advance (Principal amount).
We have compiled in the following table the HBA Rates with effect from 25.11.1985. The Rate of Interest until 31.03.2017 was depending upon amount of HBA sanctioned and it would be charged from the date of payment of 1st Installment of HBA.
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 25-11-85 to
23-6-87 (2) |
|
| Rs. 25,000 | 7% |
| Rs. 50,000 | 7 ½% |
| Rs. 75,000 | 8% |
| Rs. 1,00,000 | 8 ½% |
| Rs. 1,25,000 | 9% |
| Rs. 1,50,000 | – |
| Rs. 2,00,000 | – |
| Rs. 2,25,000 | – |
| Rs. 2,50,000 | – |
| Rs. 5,00,000 | – |
| Rs. 7,50,000 | – |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 24-6-87
to 25-7-90 (3) |
|
| Rs. 25,000 | 7% |
| Rs. 50,000 | 7% |
| Rs. 75,000 | 8% |
| Rs. 1,00,000 | 8% |
| Rs. 1,25,000 | 9% |
| Rs. 1,50,000 | 9% |
| Rs. 2,00,000 | 10% |
| Rs. 2,25,000 | 10 ½% |
| Rs. 2,50,000 | 11% |
| Rs. 5,00,000 | – |
| Rs. 7,50,000 | – |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 25-7-90
To 15-1297 (4) |
|
| Rs. 25,000 | 7 ½% |
| Rs. 50,000 | 7 ½% |
| Rs. 75,000 | 9% |
| Rs. 1,00,000 | 9% |
| Rs. 1,25,000 | 10% |
| Rs. 1,50,000 | 10% |
| Rs. 2,00,000 | 11% |
| Rs. 2,25,000 | 11 ½% |
| Rs. 2,50,000 | 12% |
| Rs. 5,00,000 | – |
| Rs. 7,50,000 | – |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 16-12-97
to 31-3-01 (5) |
|
| Rs. 25,000 | 7 ½% |
| Rs. 50,000 | 7 ½% |
| Rs. 75,000 | 9% |
| Rs. 1,00,000 | 9% |
| Rs. 1,25,000 | 9% |
| Rs. 1,50,000 | 9% |
| Rs. 2,00,000 | 11% |
| Rs. 2,25,000 | 11% |
| Rs. 2,50,000 | 11% |
| Rs. 5,00,000 | 11% |
| Rs. 7,50,000 | 12% |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 1-4-01 to
31-3-02 (6) |
|
| Rs. 25,000 | 6 ½% |
| Rs. 50,000 | 6 ½% |
| Rs. 75,000 | 8% |
| Rs. 1,00,000 | 8% |
| Rs. 1,25,000 | 8% |
| Rs. 1,50,000 | 8% |
| Rs. 2,00,000 | 10% |
| Rs. 2,25,000 | 10% |
| Rs. 2,50,000 | 10% |
| Rs. 5,00,000 | 10% |
| Rs. 7,50,000 | 11% |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 1-4-02 to
31-3-03 (7) |
|
| Rs. 25,000 | 6% |
| Rs. 50,000 | 6% |
| Rs. 75,000 | 7 ½% |
| Rs. 1,00,000 | 7 ½% |
| Rs. 1,25,000 | 7 ½% |
| Rs. 1,50,000 | 7 ½% |
| Rs. 2,00,000 | 9 ½% |
| Rs. 2,25,000 | 9 ½% |
| Rs. 2,50,000 | 9 ½% |
| Rs. 5,00,000 | 9 ½% |
| Rs. 7,50,000 | 10 ½% |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 1-4-03 to
31-3-12 (8) |
|
| Rs. 25,000 | 5 % |
| Rs. 50,000 | 5 % |
| Rs. 75,000 | 6 ½% |
| Rs. 1,00,000 | 6 ½% |
| Rs. 1,25,000 | 6 ½% |
| Rs. 1,50,000 | 6 ½% |
| Rs. 2,00,000 | 8 ½% |
| Rs. 2,25,000 | 8 ½% |
| Rs. 2,50,000 | 8 ½% |
| Rs. 5,00,000 | 8 ½% |
| Rs. 7,50,000 | 9 ½% |
| If the sanctioned HBA is upto
(1) |
Rate of Interest |
| 1-4-12 to
31-3-17 (7) |
|
| Rs. 25,000 | 6% |
| Rs. 50,000 | 6% |
| Rs. 75,000 | 7 ½% |
| Rs. 1,00,000 | 7 ½% |
| Rs. 1,25,000 | 7 ½% |
| Rs. 1,50,000 | 7 ½% |
| Rs. 2,00,000 | 9 % |
| Rs. 2,25,000 | 9 % |
| Rs. 2,50,000 | 9 % |
| Rs. 5,00,000 | 9 % |
| Rs. 7,50,000 | 9 ½% |
For the year 2017-18 and 2018-19 HBA interest rate was fixed at 8 ½ % . There is no slab for various interest rate from this period. For all the amounts of HBA received single rate of interest was applicable
In the financial year 2019-20, for the months from April 2019 to September 2019 House Building Advance Interest Rate for Central Government was continued to be 8 ½ % .
Update 03.10.2019:
From the 1st October 2019, Ministry of Housing and Urban Development has fixed the HBA interest rate as 7.9% for all the House Building Advances received by the Central Government Employees
Another important change in HBA Rules after implementation of 7th Pay Commission Report is the clause meant for charging higher rate of interest of 2.5% over and above the appplicable rate of interest from the employee and later granting the same as rebate to the Employee for adhering to conditions stipulated in HBA Rules has been done away with. In other words, Govt would charge only the applicable rate of interest for HBA during interest recovery period.
However, Penal interest of 2% over and above existing rate of interest will be recovered from the employee for those periods which are not covered by insurance of the house.
Rebate in interest for “small family norms” has been withdrawn :
Till implementation House Builidng Rules 2017, the rate of interest on HBA will be 1/2% less than the normal rate to employees follow Small Family Norms. This concession has been withdrawn now.