TomorrowMakers

Many financial institutions and property developers offer a host of incentives to women looking at homeownership. These range from lower interest rates on a home loan, waiver of processing fee or lower stamp duty charges, preferential repayment plans, lower booking amounts, etc. Government benefits like PMAY, subsidies and tax breaks make for a strong case for why female homeownership is on the rise.

Why make women the primary or co-applicant when availing of housing loans?

As more women gain financial independence, they realise the importance of taking charge of the financial aspect of their lives. One amongst them is homeownership. Women have always been key influencers regarding home-buying decisions. However, today, they are doing a lot more than just voicing their opinions regarding the use and functionality of the home.

A host of measures introduced by the government and financial institutions has incentivised families and women themselves to take the lead when it comes to real estate and leverage home loans for women. Here are some reasons why:

Lower interest rates on a home loan

Women tend to be more reliable as borrowers and have a better credit standing which works in their favour when applying for a home loan. Most banks and financial institutions offer preferential home loan interest rates for women in India. The home loan subsidy for women usually ranges between 0.05% (5 basis points) to 0.2% (20 basis points). Even though the difference may seem marginal, it helps reduce your monthly EMI and translates into significant savings on the interest outflow over the tenure of the mortgage of the home loan facility for women.

Extended tenures 

Most mortgage lenders cap the repayment age at 65 years for male borrowers. However, women can get extended tenures on loans till the age of 70. This is primarily owing to the fact that women tend to live longer than men and present lower age-related risk.

This means women can opt for a longer loan duration of, say, 30 years compared to the standard 25-year tenure available to male borrowers. This, in effect, can help women reduce their EMI commitment, have larger disposable income in hand and have better control over finances.

Related: How To Financially Plan For Your First House

Lower stamp duty charges 

Stamp duty charges have to be paid on all property transactions, the percentage of which varies from one state to another. If the property is registered in a woman’s name, many states levy 1% to 2% lower stamp duty charges. Considering the high value of transactions, the savings on stamp duty can be substantial.

Delhi, Maharashtra, Punjab and Rajasthan are some states that offer concessional stamp duty rates, whereas states like Jammu and Jharkhand have gone a step ahead and completely waived off stamp duty on housing loans for women.

Tax benefits for women

When availing of housing loans, women can claim tax deductions on both the repayment of principal as well as the interest. The benefit is available even when they are registered as joint-owners of the property. All co-borrowers can claim a benefit of up to Rs 1.5 lakh in a financial year on the principal repaid under Section 80C and another Rs 2 lakh on repayment of interest on home loan under Section 24 of the IT Act. If there are two borrowers on the home loan, that could mean savings of Rs 7 lakh on the taxable income for the household.

Related: How To Maximise Tax Benefits Under A Joint Home Loan?

Government subsidies

To make housing accessible and affordable to all, the government has introduced a Credit Linked Subsidy Scheme (CLSS), namely the Pradhan Mantri Awas Yojana (PMAY), that offers a host of subsidies and benefits to the economically weaker section. The PMAY especially encourages homeownership among women across cities and villages. The benefits include interest rates concessions on home loans for women, interest subsidy up to Rs 2.67 lakh, no pre-payment charges, reduction in interest calculation on a daily basis, etc.

Other incentives

Many financial institutions and property developers too offer additional incentives to women buyers. These range from lower interest rates on a home loan, waiver of processing fee or lower stamp duty charges, preferential repayment plans, lower booking amounts, etc.

Related: Looking For A Home Loan? Here's What You Need To Know

All these benefits make it easier for women to buy their dream home and gain a sense of ownership, stability and financial independence.