New Delhi, Jul 4 (IANS): The government Wednesday announced one percent interest subsidy on housing loan up to Rs.15 lakh to give a boost to low-cost housing projects in the country.

The union cabinet chaired by Prime Minister Manmohan Singh gave a nod to the proposal for extending the scheme of interest subvention of one percent on housing loans up to Rs.15 lakh where the cost of the house does not exceed Rs.25 lakh.

The extended scheme will benefit all house loans availed in financial year 2012-13.

A budgetary provision of Rs.400 crore has been made for the current financial year for implementing the scheme.

Following extension of the scheme, the limit of subsidy for an individual borrower would be Rs.14,912 for a loan of Rs.15 lakh and Rs.9,925 for a loan of Rs.10 lakh, according to an official statement released after the cabinet meeting.

Earlier, the limit for housing loans that were eligible for an interest subsidy of one percent was Rs.10 lakh, where the cost of the house did not exceed Rs.20 lakh.

The National Housing Bank is the nodal agency for implementing the scheme both for scheduled commercial banks and housing finance companies.