Why Should Women be Primary or a Co-Applicant When Availing Home Loan?

Updated: Friday, March 12, 2021, 15:13 [IST]

The number of women applying for home loans has risen dramatically over the years as more women become financially independent. Due to social changes, women are becoming more interested in homeownership. Banks now provide attractive home loans to help people realize their long-held dream of owning a home. Women are entitled to additional benefits in order to enable and inspire them to become financially self-sufficient. Home loan providers are introducing special schemes and resources for women to own their homes, as well as expanding some exclusive home loan benefits for ladies, as the government is also encouraging women entrepreneurs.

Let's take a closer look at how women can profit from home loans from banks or non-banking financial companies (NBFCs).

Lower interest rates on a home loan

Banks typically give women borrowers home loans at rates that are 50-100 basis points lower than those offered to men. Women will be able to repay the loan more easily as a result of this. While the interest rate subsidy is just 0.1 percent lower, it has a substantial effect on EMIs and makes long-term repayment easier.
If a woman took a home loan from the State Bank of India (SBI), today, she will only have to pay 6.80 percent interest on a loan up to Rs 30 lakhs. Men, on the other hand, have a 7% on the loan. Even if the difference does not seem to be significant, any saving is preferable to none at all.
Say, for example, a male home loan applicant paying an interest of 7% on a loan of Rs 31 lakhs for 20 years, would ultimately pay around Rs 57,68,224. In the case of a women home loan borrower, the loan is priced at 6.8%, the overall loan liability would be Rs 56,79,246.

Lower stamp duty charges

When a property is registered in the name of a woman, most Indian states charge a lower stamp duty. It is the fee that the buyer must pay in order for the property to be registered with the government. Stamp duty varies with different states. On the occasion of Women's Day, the governments of Karnataka and Maharashtra cut stamp duty fees for women borrowers.

Extended Tenure

Women who apply for a home loan get a longer repayment period of up to 25 years. This allows women to lower their monthly EMI and lessen their financial burden. Women can even pay off their loans early without having to worry about facing foreclosure.

Stamp Duty in key Indian states

State	Stamp duty rate for men	Stamp duty rate for women
Delhi	6%	4%
Haryana	6% in rural 8% in urban	4% in rural 6% in urban
Uttar Pradesh	7%	Rebate of Rs 10,000 on overall charges
Rajasthan	5%	4%
Punjab	6%	4%
Maharashtra	6%	5%

Tax Benefits for women Applicants

On top of that, women get tax breaks on their home loan repayments. The maximum tax deduction on the principal sum is Rs 1.5 lakh, and the maximum tax deduction on interest repayment is Rs 2 lakh. Both husband and wife will assert tax deductions up to Rs 3 lakh if they are co-owners of the property and have separate sources of income. Both partners will be entitled to assert tax deductions on their earnings under Section 80C, Section 24, and Sections 80EE and 80EEA as a result of this.

Advantage of Government policies

The government has made it mandatory for property purchased under the Pradhan Mantri Awas Yojana (PMAY) to be registered in the name of at least one woman in the household. Women who take out a housing loan through the flagship program's a credit-linked subsidy scheme (CLSS) get interest rate reductions. On housing loans of up to Rs 6 lakhs, women borrowers from the economically weaker segment and the low-income community (LIG) can get a 6.5 percent interest subsidy.