Women home loan applicants borrowing more than men

With data revealing that women’s participation in property purchase and home loans is increasing, we examine what this means for women’s empowerment and how it will affect the real estate sector

While the ratio of working males in India is higher in comparison to women, yet, a recent report (Bankbazaar-Moneymood 2019) indicates that when it comes to taking a home loan, women borrowers have outpaced men in 2018, in terms of the size of borrowing. According to the report, the average home loan ticket size for female primary applicants was Rs 27.57 lakhs, as compared to Rs 22.97 lakhs for male applicants.

According to Vijayasri S Kaimal, an investment analyst at Geojit Financial Services, the surge in women home loan applicants may be attributed to:

  • “The benefits offered by several states and banks, for homes bought or home loans taken in a woman’s name.
  • Additional benefits like higher loan amount, increased income tax benefits, etc., when the spouse (wife) is made a co-owner and co-borrower.
  • The considerable increase in the number of working women during the last decade.”

Stamp duty rates for men and women in different states

StateFor menFor women
Jharkhand7%Only Re 1
Delhi6%4%
Haryana6% in rural

8% in urban

4% in rural

6% in urban

UP7%Rebate of Rs 10,000 on overall charges
Rajasthan5%4%
Punjab6%4%
Maharashtra6%6%
Tamil Nadu7%7%
West Bengal5% in rural

6% in urban

(Plus 1% if property cost is >Rs 40 lakhs)

Same
Karnataka5.6%5.6%

Note: List is not exhaustive – charges are indicative and subject to change.

Table courtesy: ANAROCK Property Consultants.

Women’s empowerment and its role in property purchase

As the number of women entering the formal sector steadily increases, more and more women are becoming involved in their own and their family’s financial decision making process. As a result, the number of women taking loans, is on the rise.

See also: More women ready to defer marriage for property purchase: Track2Realty survey

“My hypothesis is that when the woman is the primary applicant, it is a two-income household. So, the average income and therefore, the average ticket size is higher. When the man is the primary applicant, a large proportion of such households are single-income households. Moreover, if the primary applicant is a woman, then, you can avail of better interest rates from banks or housing finance companies (HFCs). The other good thing is that if the primary applicant is a woman, then, the property also needs to be co-owned by the woman, which helps in terms of fostering joint ownership and having women step into the formal credit system,” explains Adhil Shetty, CEO of BankBazaar.com.

Advantages of property ownership in a woman’s name

Experts believe that having more assets in their name, can improve the economic status of women in India, which in turn, can make them less vulnerable to exploitation. So, the different measures taken by the government to boost investments by women in the realty sector, in the form of lower interest rates and lower stamp duties, will encourage more people to have their spouse as co-owners. The number of women working in the formal sectors is also increasing. With the Real Estate (Regulation and Development) Act (RERA) making investing in property more transparent, it is expected that the number of women borrowers will only increase over time.

Points to consider, while applying for a home loan in a woman’s name

  • The credit score of both the applicants will matter, if you are going to take a loan jointly to buy the property. So, the better your individual scores, the better will be the deal you get.
  • Any litigation or property dispute, will involve all the owners of the property. So, make sure that the property is clear of disputes, before you invest.
  • The tax benefit to both the partners is applicable, only if both have separate and genuine sources of income. If your spouse does not have an independent source of income, he/she will not be able to avail of the tax deduction.
  • In case the property is jointly owned by both the spouses, it may ease up succession issues.
  • Most banks offer lower interest rates of 0.05 to 0.25 per cent, if the primary borrower is a woman.
  • Several states offer a partial waiver on stamp duty, if the property is registered in a woman’s name – either as a sole or joint owner.
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