Should women go for buying a home independently? There is no reason they should not. After all, every woman has the right to worry about her own long-term security in an increasingly uncertain world. Today, a woman taking a home loan to buy an apartment is not just entitled to the traditional home loan benefits. In addition, there are also special advantages for women or what you call the special home loan benefits for ladies.
Remember, not every woman needs to take a home loan independently. They can also add to the benefits of a home loan by becoming a co-borrower with the spouse. In such cases, the tax benefits of a home loan get expanded in a big way. We’ll look at that in greater detail in the subsequent paragraphs.
Do banks offer special incentives for women?
Not just the banks or home financiers, but even the Central Board of Direct Taxation (CBDT) has provisions that are tweaked specifically for women seeking to participate in home ownership. Here are some of the home loan benefits for ladies, whether taking a home loan individually or participating as a co-borrower.
- Most home loan providers offer an interest incentive if the borrower is a woman. At times, this benefit is also extended if the lady participates as a co-borrower. If you look at the home loan benefits for ladies, most banks offer about 50-100 bps lower rates for woman borrowers. What does that mean in terms of EMI saving per month? If you assume a home loan of Rs1 crore for 25 years at the rate of 9.5%, then the approximate EMI comes to Rs87,370. However, if the bank offers 100 bps (i.e. 1%) lower for a lady borrower, then the EMI comes down by nearly Rs7,000 per month to Rs80,523. A simple calculation would tell you the substantial savings over a 25 year EMI period.
- If a lady opts in as a co-borrower in a home loan, assuming that she also has income and files her own tax returns, the home loan benefits to the family can actually double. There are two advantages of a lady opting in as a co-borrower. Firstly, the combined income of the couple would entitle them to higher loan eligibility and much greater flexibility in choosing a suitable home for their family. Just like the male partner, the lady also enjoys similar benefits under Section 24 and Section 80C of the Income Tax Act on home loan interest and home loan principal respectively. Check out the table below.
| Type of Tax Benefit available on home loan |
Home loan tax benefit for individual |
Home loan tax benefit if taken jointly as a couple |
| Principal under Section 80-C |
₹ 1,50,000 |
₹ 3,00,000 |
| Interest under Section 24 |
₹ 2,00,000 |
₹ 4,00,000 |
| Total Deductible |
₹ 3,50,000 |
₹ 7,00,000 |
Remember that these are maximum benefits available and the actual benefits would be contingent on the amount actually paid towards servicing the home loan and their respective contributions.
- It is not just the bank and the CBDT, but even the government is more than willing to encourage the lady borrower to have a greater say in home ownership. One of the home loan benefits for ladies that state governments offer is in the form of lower stamp duty to encourage home ownership for women. In most states, the stamp duty charges payable for a woman property buyer is nearly 100 bps to 200 bps lower. That is substantial saving of up to Rs2 lakhs on a mid-end property valued at Rs1 crore.
- There is one more special benefit for woman under the Pradhan Mantri Awas Yojana (PMAY) housing initiative launched by the Government of India in 2015. In order to empower women in multiple ways, the PMAY makes female co-ownership mandatory for the female head of the family. For the economically weaker sections and low-income groups, this benefit is also extended to widows and single women. In fact, you would be surprised to know that in the case of first-time home buyers, the PMAY scheme even offers credit subsidy if there is a lady co-owner in the property.
(Note: The PMAY-Urban scheme has been extended till December 31, 2024 and the PMAY-Gramin scheme was extended till March 2024.)
Why homeownership for women?
Home ownership is a step towards greater women empowerment. Apart from basic considerations of long term security for women and asset creation, there are some additional benefits if women become a co-borrower and a co-owner. Most banks consider applications by women and applications with women co-borrowers favourably. That is because, data analytics has shown that women are less likely to default on loans. Hence women not only have a higher chance of loan approval, but also get favourable credit terms.