Home loan for women: From lower interest rates, tax benefits, to exemptions - check all benefits women borrowers enjoy

As more and more women embrace their true capabilities and achieve financial independence, they are now actively participating in important life choices, such as buying a house or making property investments. This has resulted in the demand for loans going up. 

A 2019 study conducted by ANAROCK, a leading Indian real estate company, revealed that approximately 30-35 per cent of homebuyers in the country were women. Another survey conducted by ANAROCK found that out of the women homebuyers, 78 per cent preferred to purchase homes for personal use, while 22 per cent intended to buy properties for investment purposes.

Atul Monga, CEO and Co-founder of Basic Home Loan informs that with the number of women applying for home loans increasing significantly, several lending institutions are offering a wide range of advantages for first-time homebuyers. 

The CEO and Co-founder of Basic Home Loan lists these exclusive advantages that women can enjoy when applying for a home loan —

Lower Interest Rates for Women Borrowers

A significant advantage for female borrowers in India is the opportunity to secure housing loans at lower interest rates. Lenders typically offer a 0.05 per cent to 0.10 per cent reduction in home loan interest rates for women. Although seemingly marginal, this reduction translates into substantial savings over the loan's duration.

Beyond mere financial benefits, these lower interest rates aim to promote gender equality in property ownership, acknowledging women's financial stability and creditworthiness. For instance, consider a borrower securing a Rs 1 crore home loan for a 20-year tenure. 

While male borrowers may receive an 8.9 per cent interest rate, female borrowers could enjoy a slightly lower rate of 8.8 per cent. Over the loan term, this translates to Rs 1 lakh in interest savings for female borrowers.

Tax Benefits and Exemptions

Women borrowers in India also enjoy various tax benefits and exemptions when availing of home loans. The Indian Income Tax Act provides deductions and exemptions that significantly reduce tax liabilities for women homeowners:

Deduction on Home Loan Interest: Under Section 24(b) of the Income Tax Act, women homeowners can claim deductions on the interest paid on home loans, up to Rs 2 lakh per annum, leading to substantial tax savings.

Principal Repayment Deduction: Section 80C allows deductions on the principal amount repaid towards home loans, with a maximum limit of Rs 1.5 lakh, further reducing tax burdens.

Joint Home Loan Benefits: Co-applicants in a joint home loan, including women, can individually avail of tax benefits, offering significant advantages for married couples purchasing property together.

Stamp Duty Exemption: Some states provide partial or full exemptions on stamp duty charges for women buyers, resulting in substantial savings during property registration.

Easier Loan Approvals

In addition to financial benefits, women borrowers enjoy advantages in loan approvals:

Better Credit Profile: Women typically maintain stronger credit histories due to responsible financial habits, including timely bill payments and lower debt-to-income ratios. Lenders perceive such borrowers as more responsible and reliable.

Higher Loan Eligibility: Lenders may offer higher loan amounts to women borrowers due to their perceived creditworthiness, facilitating purchases of prime properties or larger homes.

Favourable Loan Terms: Women borrowers often negotiate more favourable loan terms, such as longer repayment periods or lower processing fees. Banks extend loans ranging from Rs 30 lakh to Rs 3.5 crore to women, with repayment periods of up to 25 years, incentivising them to take out loans.

Critical factors to consider:

Securing a home loan demands meticulous long-term planning involving thorough comparisons of interest rates, features, and additional benefits. It's imperative to assess your home loan eligibility to determine the amount you qualify for and explore strategies to enhance it. Always conduct due diligence to ensure you make informed decisions tailored to your financial needs and aspirations. Keep the following in mind:

● Conduct thorough comparisons of loan offers from different lenders to ensure optimal terms and features.
● Review all terms and conditions, including interest rates, fees, and repayment obligations, to make informed decisions.
● Consider long-term financial implications, ensuring affordability and alignment with future goals.
● Ensure compliance with legal and regulatory requirements related to property ownership and taxation.

Atul Monga says that empowering women in India through enhanced access to homeownership opportunities is essential for fostering economic empowerment and gender equality. "By leveraging the benefits and support provided by lenders and government initiatives, women can embark on their homeownership journey with confidence and empowerment, contributing to their financial independence and well-being," he sums up saying.