About the Subvention Scheme Calculator
What is the Subvention Scheme Calculator?
Under a subvention scheme (such as 20:80 or no-EMI-till-possession offers), the builder pays the interest on your home loan during construction. It is effectively a discount, but you remain liable to the bank if the builder stops paying.
Enter the loan, the average share disbursed during construction, the rate, the subvention period and any cash discount offered instead. The calculator shows the interest the builder covers and which deal is better.
How to use the Subvention Scheme Calculator
- Home Loan Amount (₹) (sample: 50,00,000)
- Average Share Disbursed During Construction (%) (sample: 60)
- Loan Rate (% per year) (sample: 8.75)
- Subvention Period (months) (sample: 24)
- Cash Discount Offered Instead (₹, optional) (sample: 0)
- Press Calculate Subvention Benefit (results also refresh as you type). The result card shows the Interest the Builder Pays for You, along with Pre-EMI interest per month during construction, Better deal and Risk to remember.
Formula used
Builder-paid interest = Loan × Share disbursed × Rate ÷ 12 × Months
- Share disbursed = the average portion of the loan released to the builder during construction
Compare this benefit with a straight cash discount on the price — the discount has no delivery risk.
Worked example
These are the sample values already filled in the calculator above, and the result it returns for them:
| Input | Sample value |
|---|---|
| Home Loan Amount (₹) | 50,00,000 |
| Average Share Disbursed During Construction (%) | 60 |
| Loan Rate (% per year) | 8.75 |
| Subvention Period (months) | 24 |
| Cash Discount Offered Instead (₹, optional) | 0 |
| Result | Value |
|---|---|
| Interest the Builder Pays for You | ₹5,25,000 |
| Pre-EMI interest per month during construction | ₹21,875 |
| Better deal | Ask the builder for a cash-discount alternative to compare |
| Risk to remember | If the builder stops paying, you owe the EMIs – RBI has cautioned against these tie-ups |
Tips for using the Subvention Scheme Calculator
- Choose RERA-registered projects with a good delivery record.
- Read the tripartite agreement carefully — you owe the EMIs if the builder defaults.
- RBI and NHB have cautioned lenders about subvention schemes after past defaults.