Buying a home is like dream come true for everyone and is one of the biggest aspirations for Indians.
The reasons are many. For some, it is to provide a sense of security the kind that does not come from living in a rented one, for others, it can be for investment for the future. For others, it can be a sense of achievement and to boost one’s self-esteem. Whatever be the reason, buying a home has become the top priority list – and we know and understand how important that for Indians is.
With more women becoming financially independent, an increasing number of women are now understanding the importance of owning a house. Though applying for a home loan is a vital process. Banks and NBFCs are offering lucrative deals like low-interest rates, customised home loan schemes, and other discounts to expand their home loan books by luring more women to invest in homes. This is where Home Loan comes in.
Let us have a detailed discussion on the benefits of Home Loan for women that are available.
Lower Borrowing Cost/Interest Rate
With women having a better track record, Lenders find women more reliable and have always encouraged them to invest in properties and buy new homes by offering them lower interest rates. Financial lending institutions provide a concession of about 0.05% to 1% on home loan rates to women borrowers. It has a significant impact on EMI and makes repayment stress free for women. This makes it more affordable for women to borrow a home loan and repay it.
The home loan does not go easy on pockets but women getting lower rate of interests, certainly adds up to a considerable amount in lowering down the EMI.
To understand more you can refer to the illustration below, the amount a women applicant can save in home loan on a lower rate of interest.
|Particulars||Women Borrower||Other Borrower|
|Loan Amount||50 Lakh||50 Lakh|
|Tenor||20 years||20 years|
|Total Principal Amount||50,00,000||50,00,000|
|Total Interest Amount||52,62,482||53,00,234|
|Total Amount Payable||1,02,62,482||1,03,00,234|
The above illustration can see women Rs.37,752/- compared to applicants. Can use it for personal use invest in.
As per you saved others their or can mutual funds.
Low Stamp Duty Charges
Stamp Duty charges is a mandatory tax imposed by the state government during sale or transfer of the property.
The rate depends on the other factors like location of the property, status of the property, usage of the property and value of the property. It varies from one state to the another.
It usually varies from 4% -10% of the cost of the property and as it is part of the property cost, even a small concession makes a big difference.
Usually, the Financial institutions offer 1%-2% lower rate as compared to a man. This may seem like a nominal amount but while considering the cost of the property, the amount saved is quite substantial while purchasing a house.
Tax Deduction Benefits
Women can also avail tax benefits while taking a home loan. The limit is up to 3.5 lakhs covered under section 80 C for Principal repayment and Section 24 (b) on Interest paid. As per the Income-tax Act 1961, the borrowers can claim a deduction of up to Rs 1.5 lakhs under section 80 C and can claim a deduction of up to Rs 2 lakhs under section 24 (b).
Over & above the deduction of 24 (b) women can claim additional deduction Rs 1.5 Lakhs under section 80 EEA. This is only applicable to the loans sanctioned from 1st April 2019 to 31st March 2021.
If taken jointly, like with their husbands or any other eligible co-applicants, then also women can claim these tax deductions. In fact, applying jointly can increase their overall deduction benefits, the couple can claim the deductions each on the Principal amount the interest paid.
However, the couple should ensure that on the sale deed/conveyance deed has the names of both the applicants as the owner of the property and women to be the main applicant.
|Sections||Tax deductions||Limit of deduction||Conditions|
|80 C||Principal Paid||Up to Rs 1.5 lakh||- The property should be self-occupied property.|
- The property should not sold within 5 years of possession
|80 C||Stamp Duty||Rs 1.5 lakh||This can be claim only in the year in which these expenses are incurred|
|24 (b)||Interest paid||Up to Rs 2 lakh||- Home loan should be taken for the purchase or construction of the house.|
- The construction should be completed within 5 years from the end of the financial year in which the loan was taken.
|80 EEA||Interest Paid||Up to Rs 1.5 lakh||- The stamp value of the property should not be more than Rs 45 lakh.|
- Should be first time buyer.
- Should not be eligible for the deduction under section 80EE.
- Loan must be sanctioned between 1st April 2019 to 31st March 2021.
Longer Repayment Tenors
Further women can avail longer tenor for loan repayment, this gives you a chance to lower your EMI and save for other financial goals that you have planned for. This also helps in reducing your stress & enable you to take care of other commitments while repaying your home loan. You can easily avail a home loan maximum of upto 30 years. With no charges levied on prepayment, you can experience more convenience as a women borrower.
Women can make use of PMAY Schemes to Secure their future financially
Women can avail benefits under Pradhan Mantri Awas Yojana (PMAY) – CLSS (Credit Linked Subsidy Scheme). PMAY makes it mandatory to keep women co-applicant while applying for Home Loan, enabling women to secure their future financially when they are old or widowed. Under CLSS, the government offers an interest subsidy up to Rs 2.67 lakhs. It gives preference to women over other applicants. The subsidy amount is given upfront on the principal outstanding, thus lowering down the interest amount.
The benefits under PMAY-CLSS scheme are categorized on the basic income
|Income Groups||Eligible Family Income|
|Economically Weaker Sections (EWS)||Upto Rs 3 lakh|
|Lower Income Group (LIG)||Rs 3,00,000 to Rs 6,00,000|
|Middle Income Group 1 (MIG 1)||Rs 6,00,001 to Rs 12,00,000|
|Middle Income Group 2 (MIG 2)||Rs 12,00,001 to Rs 18,00,000|
Women can enjoy the benefits under PMAY-CLSS scheme only if meets below guidelines –
- At least one woman in the family must be registered as the owner of the new property, irrespective of the fact whether she is buying the property or not.
- You or your immediate family do not own a ‘pucca’ house anywhere in India. (you qualify, even if your parents own a home and you live with them).
Other Benefits under PMAY Scheme:-
|Particulars||EWS||LIG||MIG 1||MIG 2|
|Annual Income||Rs 3 Lakh||Rs 3 lakh to Rs 6 lakh||Rs 6 lakh to Rs 12 lakh||Rs 12 lakh to Rs 18 lakh|
|Repayment Tenor (in years)||20 years||20 years||20 years||20 years|
|Loan amount for subsidy qualification||Rs. 6 lakh||Rs. 6 lakh||Rs. 9 lakh||Rs. 12 lakh|
|Max. Property Carpet Area||30 square meters||60 square meters||120 square meters||160 square meters|
As you can see there are many benefits women can avail while thinking of buying a house. Moving towards financial independence, empowering women, all can be done with a customised home loan.
Use the home loan eligibility calculator to see if you qualify and get started now.