Home Loan Benefits for Women in India

Owning a home is a significant milestone, and for women in India, this dream is becoming more attainable thanks to various home loan benefits for ladies tailored specifically for them. Financial institutions and government initiatives are offering a range of advantages to encourage female homeownership, financial independence, and security. Here, we explore the key benefits available to women when they apply for a housing loan for women in India.

What is a Home Loan?

A home loan is a financial tool that helps individuals buy a house by borrowing money from a bank. The loan is repaid through monthly installments i.e.EMI over a set period. It makes homeownership affordable, offers tax benefits, and allows to build your dream home.

Home Loan Benefits for Women:

Lower Interest Rates

One of the most attractive benefits for women taking out a home loan is the lower interest rate. Many banks and financial institutions offer a concession on the women’s home loan interest rate, typically around 0.05% lower than the standard rates. This concession can lead to significant savings over the loan tenure, making home ownership more affordable.

Higher Loan-to-Value Ratio

Women borrowers often enjoy a higher loan-to-value (LTV) ratio. This means they can take a loan for larger portion of the property’s value through the loan, reducing the amount needed for the down payment. For example, while the standard LTV ratio might be 80%, women could be eligible for an LTV ratio of up to 90%, easing the initial financial burden that means she can take higher amount of loan from bank/lender. This totally depends on lender and might vary.

LXME Pro-Tip: Ideally it’s better to make a higher downpayment and take a loan for the remaining as it helps you reduce the overall loan amount & EMI payments on a monthly basis

Tax Benefits

Women can also take advantage of various tax benefits when they take out a home loan. Under Section 80C of the Income Tax Act, the principal repayment of a home loan is eligible for a deduction of up to ₹1.5 lakh. Additionally, the interest payment on the home loan qualifies for a deduction under Section 24(b), providing further tax relief and boosting overall savings.

Note: These tax benefits are available only under old tax regime.

Special Home Loan Schemes

Many banks have introduced special home loan schemes for ladies, offering attractive interest rates and benefits tailored to meet the needs of women homebuyers. These initiatives provide additional perks for women borrowers, making the home-buying process smoother and more affordable.

Government Subsidies

Under the Pradhan Mantri Awas Yojana (PMAY), women can benefit from a home loan subsidy for female applicants. This initiative is particularly aimed at women from economically weaker sections (EWS) and low-income groups (LIG). The subsidy on home loan for ladies can significantly reduce the effective interest rate, making home loans much more affordable. To be eligible, the woman should be the sole or co-owner of the property, ensuring that the subsidy directly supports female homeownership.

Stamp Duty Concessions

In many states across India, women are eligible for lower stamp duty rates when registering property in their name. This concession can range from 1% to 2% less than the standard rate, resulting in substantial savings. For instance, in Mumbai, Maharashtra the stamp duty for women buyers is 5%, compared to 6% for men. This reduction encourages women to buy home.

Improved Credit Score

Taking out a home loan and repaying it responsibly can improve a woman’s credit score. A higher credit score can lead to better financial opportunities, like getting better terms on future loans and credit cards.

Eligibility Criteria for Home Loans for Women

Eligibility criteria for home loans generally include:

• Age: Typically, 18 to 65/70 years (Might vary bank to bank)
• Income: Steady source of income, with the amount varying by banks.
• Employment Status: Both salaried and self-employed women can apply.
• Credit Score: A good credit score, usually 700 and above.
• Property Documents: Clear title and approved property.

Specific eligibility criteria can vary from one bank to another, so it’s essential to check with the chosen financial institution for precise requirements.

Buying a home is one of the important and biggest goals every women has, however, before you plan for this, have your critical goals like emergency fund, your child’s education fund & retirement fund in place and then put in money for other important goals . Inorder to fulfill the other important goals like buying a home for that too you should save and invest. You can start investing with LXME’s expert curated mutual fund portfolios which are well-researched.

There are lot of home loan benefits for ladies available in India that are designed to encourage female homeownership and promote financial independence. With lower interest rates, higher LTV ratios, special schemes, government subsidies, tax benefits, and stamp duty concessions, women have lot of opportunities to invest in their own homes. These benefits not only make homeownership more accessible but also contribute to the financial empowerment of women.

Try LXME’s home loan calculator you can get calculate the Home Loan EMI & how your loan amount gets affected when you pre-pay some amount towards your home loan.

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