What is Subvention in Real Estate?

Kishan Thakkar K

Everyone wants to own their dream home. By having a bank loan, you get to make such purchases a little easier on your pocket. People looking to buy a house or apartment should be aware of what they are investing in before putting the money into the house.

A subvention scheme is a kind of home loan introduced by the government. A subvention scheme is a legal agreement between a buyer, a seller, and the finance company that provides the mortgage loan. 

When a buyer chooses a subvention scheme, no interest is paid until an agreed-upon period of time, and the contract will specify this period of time.

Subvention schemes are offered by many real estate developers, where the buyer pays 5% to 10% of the house’s total cost in advance. The remainder is paid through a loan. 

Home buyers benefit from this scheme as they do not have to pay the loan amount until after they have obtained possession of the property.


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