All of us dream of become homeowners. It is a way of ensuring lifelong financial security; the kind that does not come from living in a rented home. But buying a home is a complicated process. Whether it is years of savings to be given as down payment, or finding the right locality to invest in; the process of buying a home is elaborate. And since property investments take a huge chunk of savings, most of us rely on home loans, which often last for over 2 decades. However, women borrowers have it a bit easy thanks to government home loan schemes for women. Let’s find out how women can benefit from home loans designed for them.
Reduced Rates of Interest
If you’ve ever purchased anything on a loan, you will know that even a point’s difference in interest rates can amount to a lot of savings. If your interest rate on the loan is high, you always end up paying more. In such a case, even a slight reduction in interest rates can make a lot of difference. This also affects your monthly EMI which is further reduced. Under the government scheme, home loan interest rates for women are reduced by 0.05% by most banks in the country. While this may seem like a small percentile, consider the following example:
Let’s say you take out a home loan of ₹50,00,000 form a bank for a tenure of 20 years. The bank offers an interest rate of 8.65% to its male borrowers and 8.60% to its female borrowers. In this case, the interest outflow for men is ₹55,28,083, but due to the reduced 0.05%, the interest outflow for women is ₹54,89,953. As a result, the savings in interest outflow for women borrowers’ accounts for ₹38,130.
Reduced Stamp Duty Charges
Stamp duty forms a part of the property cost, and the reduced interest rate can make a huge difference in reducing stamp duty charges too. Most lenders provide 80%-90% finance on home loans, with a set percentage of money paid in stamp duty char.ges. But as per the home loan subsidy for women, a concession of 1%-2% is typically applicable on stamp duty charges. If a woman purchases a property worth ₹50,00,000, she can save ₹50,000 to ₹1,00,000 on stamp duty charges alone.
Both, male and female borrowers are eligible for tax deduction on home loan repayments. The maximum tax deduction permitted in principal and interest repayments is ₹1,50,000 and ₹2,00,000 respectively. If a woman borrower applies for a home loan along with her husband, she can receive tax deduction in equal measures.
Longer Repayment Tenures
While male borrowers are typically provided with loan repayment tenures of 20 years and a maximum age of 65 years to repay the loan, whichever is early; home loans for women are offered for tenures of up to 30 years or up to 70 years of age of the borrower, whichever is early.
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