-By Manu Singh, Business Head – Housing Finance, Kotak Mahindra Bank Ltd
The Indian real estate sector is undergoing a significant transformation, with women emerging as key investors in the property market. According to a recent survey by Anarock, a leading property consultancy firm, 70% of women prefer real estate as their most preferred investment avenue, with many of them considering premium or luxury homes priced over Rs 90 lakh. Impressively, majority of the women surveyed have also cut down their stock market exposure due to the high volatility.
Thus, this trend is clearly driven by favorable lending policies, stable returns, and the security of home ownership, making real estate an attractive investment option for women.
Encouraging home ownership for women: Women are increasingly becoming financially independent and are taking an active role in real estate investments. Recognizing this shift, the Indian government and financial institutions have introduced favorable 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.
One of the most significant benefits for women homebuyers is the lower interest rate offered by many institutions. Lenders provide women borrowers with a discount of 0.05% to 0.10% on the interest on housing loans. Although this may seem small, it can lead to substantial savings over the loan tenure. For instance, on 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.
Higher housing loan eligibility: In addition to lower interest rates, women borrowers often benefit from higher housing loan eligibility. Since women are considered less likely to default on payments, lenders are more willing to offer them a higher loan amount. This increased eligibility enables women to afford better properties that meet their long-term needs. To be eligible for a higher loan amount, women must meet certain criteria, including a minimum age of 21 years, stable income, and a good credit score.
Another significant advantage for women homebuyers is the reduced stamp duty charges. Many state governments offer a 1% to 2% reduction in stamp duty charges if the property is registered in a woman’s name. This reduction in upfront costs makes homeownership more affordable for women. For example, in Maharashtra, women can enjoy a 1% discount on stamp duty, while in Delhi, the discount is 2%.
Multiple tax benefits: Women borrowers can also 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. If the home loan is taken jointly with a spouse, both co-applicants can claim deductions individually, doubling the benefits.
First-time buyers gain advantage: The Indian government has also introduced various schemes to provide first-home buyer benefits to women. The Pradhan Mantri Awas Yojana (PMAY) offers interest subsidies of 3% to 6.5% for EWS, LIG, and MIG categories. State governments also offer incentives specifically targeted at first-time woman buyers. The Affordable Housing Fund (AHF) provides financial assistance for affordable housing projects to promote homeownership among women.
To avail of these benefits, first-time woman buyers need to submit certain documents for verification, including proof of identity, address, income, and property documents. It is essential to ensure that all documents are valid and updated to avoid delays in loan processing.
For first-time woman buyers, the journey to homeownership has become more accessible and empowering. With the advent of lower interest rates, increased home loan eligibility, and a range of government schemes offering exclusive benefits, women can now confidently invest in their future through real estate. By leveraging the available home loan benefits and gathering the necessary documents, women can seamlessly navigate the home loan application process.
Additionally, utilizing an EMI calculator enables them to accurately plan their finances and make informed decisions. As the Indian real estate sector continues to grow and evolve, it is expected that an increasing number of women will take charge of their financial futures and turn their dream of owning a home into a reality. As one real estate expert put it: ‘with the growing independence and higher disposable incomes, women are increasingly coming to the housing market as convinced investors.” This is the next big leap forward for the housing industry, it seems.
The author is the Business Head – Housing Finance, Kotak Mahindra Bank
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