When Ruchi Srivastava, a resident of New Delhi and a government employee, decided to invest in real estate and buy her own two-bedroom flat, she faced no difficulty in arranging the required amount.
It is not just her good credit record that helped her in securing the desired home loan, but the favourable lending available across several nationalized and private banks for women.
Moreover, discounts available across projects for women and discounts available during the registration of property with the authority made it cheaper for Srivastava, who eventually got a significant discount on her investment.
Simply put, women homebuyers have a better chance of getting additional discounts while buying a property in today’s market.
Rohit Shah, financial planner and founder of Gettingyourich, says: “Women have some benefits when they look at buying property. While some banks are already offering lower rates to women applicants, some states have lower stamp duty rates for women owners.”
WHAT ARE THESE INCENTIVES?
Benefits under the Credit-linked Subsidy Scheme (CLSS): The guidelines of Credit-linked Subsidy Schemes under the Pradhan Mantri Awas Yojana (PMAY) have made it mandatory for buyers to include the name of a woman in the family.
The guidelines clearly say that women are rated as preferential borrowers.
This also means that irrespective of who applies for the loan, the house bought or constructed by availing loan under this scheme would be in the name of a woman in the household of the applicant, or in their joint name, with the woman deemed the owner.
This clause is a progressive step meant to empower women in Indian households. Bankers say that women show a lower rate of delinquency than men in honouring home loan repayments. Being homemakers, women have also been observed to maintain their newly bought house far better than men.
This focus on women buyers is changing the dynamics of the residential market, and banks are more than eager to lend to women buyers.
Home loan rates: A comparative analysis of bank lending rates suggests that women usually get lower rates while applying for a mortgage.
A number of banks including nationalized and private sector banks have lowered the rates in recent times. For example, for a salaried woman borrower applying for a home loan under or equal to Rs 30 lakh, ICICI Bank offers a floating rate of interest of 8.35%.
The country’s leading bank, SBI, offers a rate of 8.30% for the same category of women borrowers. In comparison, men are offered 0.05% higher rate. This is however subject to change as per the monetary policies and market fluctuations. The rates are often discussed and negotiated before finalizing the loan documents.
Stamp duty and property registration: Borrowers who buy in a project under construction may have to pay the stamp duty and registration charges. A number of states including Uttar Pradesh, Rajasthan, and Madhya Pradesh have lower property registration rates for women than that offered to men.
You can save up to 2% on stamp duty, if the property is in the woman’s name. In Delhi, the stamp duty rate is 4% for women, compared to 6% for men.
WHAT LIES AHEAD?
India has already embarked on a nationwide digitization programme for all consumers.
“It is expected that government may announce further sops under its ambitious digitization programme. Under this, women, who are seen to be using more cash in transactions, may probably be incentivized for using digital payment modes. While this will further empower them, this may add to the overall benefits while buying a property,” Shah of Gettingyourich says.
Experts say that the real estate market, which is already registering oversupply, may further launch various discounts for attracting women buyers to the market.
Ashish Gupta, a real estate consultant, says: “A woman on negotiating table is often perceived as a serious buyer. Being the homemaker, she is often the decisionmaker in many families. And development firms are taking women buyers seriously.”
Srivastava’s case is not isolated occurrence – if you are a prospective buyer, you may benefit from the current price correction and the glut across micromarkets.