Owning a property gives
one a sense of lifelong financial security. A permanent roof over the head can
prove incredibly beneficial, especially if you are stuck in a financial crunch.
But with the rising property rates, one has little choice but to take on a home
loan to purchase a property. Most couples today opt for joint loans, in which
the husband is typically named as the primary borrower and the wife is named
the secondary borrower. But did you know that there are many perks of naming
your wife (or a woman per se) as the primary loan borrower. Let’s find out how
you can benefit by naming a woman borrower the primary applicant when you apply for home
loan.
Reduced
interest rates: A housing loan is a high value loan which
lasts for tenures lasting up to 25 years, sometimes more. Therefore, it is in
your own interest to get lower interest rates on this loan. A high interest
rate, directly results in you paying a higher loan repayment amount in general
and a higher equated monthly instalment (EMI) in particular. As such, even a
slight reduction in the rate of interest can amount to savings to the tunes of
a several thousands, possibly a few lakhs in the long term. A lower interest
rate also reduces your EMI considerably. Now, when you name your wife as the principal
loan applicant, you can get a reduction of 0.5% in the loan interest rate as
per government rules. The 0.5% makes a huge difference on high-value loans. All
lenders are obligated to provide female borrowers with this reduced interest
rate benefit.
Lower
stamp duty charges: Most lenders generally provide finance
for approximately 85% of the market value of the property and the borrower must
pay a certain percentage of money in stamp duty charges. Now, the advantage of
naming you wife as the primary applicant of the house loan is that you pay
lesser amounts on the stamp duty charges. As you know, stamp duty charges are
levied on the property cost. With the reduced interest rate, the stamp duty
charges are also lowered significantly. Women borrower can get a concession of
1% to 2% on the stamp duty charges associated with the loan, thanks to
subsidies offered by the government on loans for women. As such, if you name
your wife as the primary borrower on a loan worth ₹5,000,000 (for instance), you end up saving
approximately ₹50,000 to ₹100,000 on the stamp duty charge
alone.
Tax
benefits: Tax benefits are provided to all applicants repaying
a home loan in
India. Whether you are a male or a female borrower, you are eligible
for tax reductions up to a maximum of ₹150,000 per annum on the principal loan amount and ₹200,000 on the interest
component of the loan. If you name your wife as the principal applicant, both
of you can enjoy these tax savings in equal measures. So, as a couple, you
receive tax reductions on approximately ₹700,000 per annum.
Age
and tenure benefits: Naming your wife as the primary applicant
on the home loan provides you with longer tenures of up to 30 years, as opposed
to the 20 year tenure provided to male applicants. Also, the maximum age for
male borrowers to repay the loan is 65 years, whereas women can repay the loan
up to the age of 70.
