7th Pay Commission: House Building Advance Interest Rate For Central Govt Employees Announced; Check Interest For Loans Upto Rs 25 Lakh

7th Pay Commission – The central government employees can get loans up to Rs 25 lakh from the government under the House Building Advance (HBA) scheme.

For the financial year 2025–2026, the central government recently maintained the interest rate on HBA for central government employees at 7.44 percent. The central government provides HBA benefit to all central government employees to help them build their own homes.

"In pursuance of Department of Economic Affairs, Ministry of Finance OM No 5(2)-B(PD)/2025 dated 24.03.2025, the interest rate applicable on House Building Advance sanctioned to Central Government Employees for the financial year 2025-26 (from 1st April 2025 to 31st march 2026) will remain unchanged at 7.44% until further orders," the Ministry of Housing & Urban Affairs said in an Office Memorandum dated March 27, 2025.

The interest rate of HBA to central government employees for the financial year FY 2024-25 was 7.44 percent, while that in 2023-24 was 7.5 percent.

The total amount of HBA that a central government employee can borrow for the construction or purchase of a new house is up to 34 months of the basic pay, subject to a maximum of Rs 25 lakh or the cost of the house or the amount according to repaying capacity, whichever is the lower. This is as per the recommendations of the 7th Pay Commission and the HBA 2017 guidelines.

The HBA comes at simple interest from the date of the installment payment. According to HBA regulations, the principal must be paid back in the first 15 years in 180 monthly installments and interest thereafter in 60 monthly installments in the next five years.

The HBA lets Central Government employees construct their own homes. Employees can avail of HBA towards repayment of a bank loan taken for the purpose of construction or purchase of a new house. Any permanent employee and those temporary employees who have five years of continuous service can avail HBA to build a home.