Top 5 Home Loan Benefits for First-time Women Buyers

In India, owning a home is considered a significant milestone. For women, owning a house adds an extra layer of security and financial stability. To encourage women to invest in property, lenders and the government offer various incentives that make it easier for them to get a housing loan. As a first-time buyer, women can enjoy several financial and non-financial advantages when applying for a home loan. This article explores the top 5 home loan benefits available to first-time female buyers in India.

Why Women Should Invest in Property

Women are increasingly becoming financially independent and are taking an active role in real estate investments. According to ANAROCK Property Consultants' H2 2024 Consumer Sentiment Survey, around 31% of homebuyers in India in 2024 were women. Recognizing this shift, the Indian government and financial institutions have introduced policies and schemes to make it easier for women to secure housing loans. These initiatives encourage homeownership and offer a range of benefits that make the process more affordable and rewarding.

Also Read: Home Loan: All You Need to Know – Godrej Capital

Lower Interest Rates on Housing Loans

One of the most significant home loan benefits for women is the lower interest rate offered by many institutions. Lenders offer women borrowers a discount of 0.05% to 0.10% on the interest on housing loans. Though this may seem small, it can lead to substantial savings over the loan tenure.

• Example: For a home loan of INR 50 lakh with a tenure of 20 years, a 0.10% discount can save a woman borrower up to INR 1 lakh in interest payments.
• Source: According to the Reserve Bank of India (RBI), most major lenders offer lower interest rates for women borrowers to encourage homeownership.
• Why It Matters: Lower interest rates reduce the overall repayment burden, making the EMI (Equated Monthly Instalments) more manageable.

Higher Housing Loan Eligibility

Women borrowers often benefit from a higher housing loan eligibility when applying for a home loan. Since women are considered less likely to default on payments, lenders are more willing to offer them a higher loan amount.

Eligibility Criteria:

• Minimum age: 21 years
• Stable income from a job or business
• Good credit score (above 700)
• Co-Applicant Benefits: If a woman applies for a joint loan with a spouse, the combined income can increase the home loan eligibility, allowing them to apply for a higher loan amount.
• Why It Matters: Higher eligibility means that women can afford to buy better properties that meet their long-term needs.

Reduced Stamp Duty Charges

Stamp duty is a mandatory tax that needs to be paid during property registration. However, many state governments offer a 1% to 2% reduction in stamp duty charges if the property is registered in a woman’s name.

States Offering Discounts:

• Maharashtra: 1% discount on stamp duty
• Delhi: 2% discount on stamp duty
• Rajasthan and Uttar Pradesh: Reduced rates for women property owners
• Why It Matters: Lower stamp duty charges reduce the upfront cost of purchasing a property, making homeownership more affordable for women.

Also Read: How to reduce interest payment on Home Loan?

Tax Benefits on Interest and Principal

Women borrowers can avail themselves of multiple tax benefits on both the principal and interest on housing loans. Under Section 80C of the Income Tax Act, they can claim deductions of up to INR 1.5 lakh on the principal repayment. Additionally, under Section 24(b), they can claim deductions of up to INR 2 lakh on the interest paid on their home loan.

• Additional Tax Benefit: If the home loan is taken jointly with a spouse, both co-applicants can claim deductions individually, doubling the benefits.
• PMAY CLSS (Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme): Offers subsidies on interest on housing loans for first-time woman buyers.
• Why It Matters: Tax deductions reduce taxable income, lowering the overall tax liability and making homeownership more cost-effective.

First Home Buyer Benefits Under Government Schemes

Women who are purchasing a home for the first time can take advantage of various government schemes designed to provide first-home buyer benefits.

• Pradhan Mantri Awas Yojana (PMAY): Offers interest subsidies of 3% to 6.5% for EWS (Economically Weaker Sections), LIG (Low-Income Group), and MIG (Middle-Income Group) categories.
• State Housing Schemes: Many state governments offer incentives specifically targeted at first-time woman buyers.
• Affordable Housing Fund (AHF): Provides financial assistance for affordable housing projects to promote homeownership among women.
• Why It Matters: These schemes reduce the financial burden on first-time buyers and make the dream of owning a home a reality.

Also Read: Joint Home Loan Ownership: Everything You Need to Know

Essential Documents Required to Avail Home Loan Benefits

When applying for a home loan, first-time woman buyers need to submit certain documents for verification:

• Proof of Identity: Aadhaar, PAN card, voter ID, or passport
• Proof of Address: Utility bill, rent agreement, or Aadhaar card
• Income Proof: Salary slips, ITR (Income Tax Returns), or Form 16
• Property Documents: Sale agreement or allotment letter
• Bank Statements: Last 6 months’ bank statements for financial evaluation
• Tip: Ensure all documents are valid and updated to avoid delays in loan processing.

The Bottom Line

For first-time woman buyers, investing in a home has never been easier. With lower interest rates, higher home loan eligibility, and various government schemes offering first home buyer benefits, women can secure their future by investing in real estate. By understanding the home loan benefits available to them and preparing the necessary documents, women can easily navigate the home loan application process.

Apply for a home loan now and take advantage of these benefits to secure your dream home!

Moreover, to accurately calculate your EMIs using an EMI calculator. This way, you save time and effort on calculations while also being able to plan your finances well!

FAQs

Q.1. Is there any scheme for first-time home buyers?

A. The Indian Government launched the Pradhan Mantri Awas Yojana Scheme in 2015 for first-time home buyers. This was done to encourage “Housing for All” and is a credit-linked subsidy scheme. Under PMAY, beneficiaries can get an interest subsidy on home loans.

Q.2. What are the tax benefits for first-time home buyers?

A. If you have purchased a home for the first time, you can claim deductions of up to INR 50,000 under section 80EE of the Indian Income Tax Act, 1961 (if you fulfil a few conditions). This is only applicable to first-time home buyers.

Q.3. Can a housewife get a home loan?

A. No, a housewife is not eligible for a home loan alone. However, she can co-apply for a loan with someone if she needs funds.

Q.4. How much home loan is tax-free?

A. Under section 80(c) of the Income Tax Act of India, 1961, a tax deduction of up to Rs 1.5 lakh can be availed every financial year on the principal repayment portion of the EMI. This deduction can only be availed after the construction of the residential house property is complete.

Q.5. How to check home loan eligibility?

A. To check your home loan eligibility, one can make use of online calculators. These assess your income and debt, check your credit score, and consider factors like age, employment, and loan tenure.

Disclaimer:

The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com