If you are planning to buy a home or shop in Ghaziabad, Uttar Pradesh, there’s some relief for you. The Ghaziabad Development Authority (GDA) has announced a reduction in interest rates on its properties following a government order.
Earlier, buyers had to pay interest at the GDA’s own rate on property installments. Now, the installment interest will be linked to bank rates, providing financial relief to residents.
Lower Interest Rates
Previously, the annual interest rate for GDA properties was 10.5%. With the new decision, the rate will match that of the State Bank of India (SBI), which is currently around 8.7%. This means a direct reduction of 1.8% to 2%.
The interest rate is now flexible, so if SBI lowers its rates in the future, your GDA installment interest will automatically decrease.
Reduced Penalty on Late Payments
Earlier, GDA charged a 3% compound interest for missed installments. Now, this penalty rate has been reduced to 2%. This will help those who are unable to pay on time and provide significant relief to many property buyers.
How Much Will You Save?
To understand the savings, consider this example:
Property price: ₹50 lakh
Old annual installment at 10.5% interest: ₹5,25,000
New annual installment at 8.7% interest: ₹4,35,000
This means an annual saving of ₹90,000. Over a 10-year loan, you could save up to ₹9 lakh. This is a substantial relief for ordinary buyers.
Why This Decision Was Taken
The government has mandated that interest rates for development authorities match bank rates. GDA also reduced the penalty rate by 1% to ease financial stress on buyers.
Many GDA flats and plots were unsold due to the higher interest rate compared to banks. Buyers preferred bank loans at 8-9% rather than paying 10.5% to GDA.
With this step, monthly installments (EMIs) will be lower, and the reduced penalty provides peace of mind to those who miss one or two payments due to financial issues.
Nand Kishore Kalaal, VC, GDA, confirmed that this move is aimed at providing significant relief to the public.
