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Smash The Patriarchy: Here’s Why Indian Women Are Buying More Homes.

Owning a home is perhaps one of the biggest accomplishments for anyone. Apart from creating an asset under your name and building a safety net for yourself, there are several reasons why it’s important to own a home, especially in today’s times. Interestingly, studies suggest that more and more Indian women are now opening up to buying their own homes, stepping away from the shadows of their fathers and husbands. In fact, owning a home is one of their top preferences when it comes to correctly investing their money. This amazing and welcome change has resulted in home loan providers designing exceptional benefits and opportunities for women. What are they? Read on to find out! 

Lower Interest Rate 

Women enjoy the privilege of paying a lower interest rate on home loans. A home loan is a big deal, and an exception to the interest rate can be a huge support. The interest rate is lower by 0.05 to 0.1%, making it relatively easier to pay the EMI and repay the entire amount within time.  

Lower Stamp Duty Charges

Stamp duty is a compulsory tax that the state government imposes on the property during its sale or transfer. While every state may have a tax rate that varies from each other, status of the property, type of property, usage of the property, location of the property etc. are all interconnected to the stamp duty charges. Majority of the states in India offer an allowance on stamp duty if the property is registered in the name of a woman, whether it is a sole proprietorship or a joint proprietorship. 

The difference in the rates usually scales from 1% to 2%, and this can make an enormous difference in the property price. 

Tax Benefits

Women also enjoy tax benefits on their home loan repayments. 

The maximum tax deduction is Rs 1.5 lakh on the principal and Rs 2 lakh on the interest repayment under section 80C and under Section 24. 

If a husband and wife are co-owners of the property and have different streams of income, the deductions on the home loan tax for the couple would sum up to Rs. 3 Lakhs on the principal amount and Rs. 4 Lakhs on payment of interest under the same. 

Access Large Amounts With Longer Repayment Tenors 

Arranging funds to buy a house is not a piece of cake. It may take years and sometimes, a decade’s savings to build one. But because of schemes like these, women can build their dream house effortlessly. 

One can access home loan amounts right from Rs. 30 Lakh to Rs. 3.5 Crores to build or buy a home. Further, home loans for women are offered for tenures of up to 30 years and till the age of 70. 

Schemes like PMAY (Pradhan Mantri Awas Yojana) 

Under the ‘Housing for All’ scheme, those with an annual income of not more than Rs.18 lakh can apply for it. Giving a higher preference to women, the PMAY makes co – ownership mandatory offering a subsidy to women up to Rs. 2.67 Lakh and this has taken a massive rise in the number of women applying for home loans in India. 

Apart from these, women enjoy numerous profitable add-on offers such as a free holiday, gold coins, vouchers and a lot more that are here to encourage women to step up on the road to women empowerment.

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Women and Money: A Long Distance Relationship

Financial Planning for Women

A large part of our belief system is based on how we are conditioned since childhood. I come from a time when most grand – mothers around me were quintessential homemakers. They were entrusted with the responsibility of taking care of the home, family and kids, while the men in the family were solely and fully responsible for making “money” decisions.

Our mothers (mostly) grew up and thereafter lived in an environment where “finances” continued to be a male dominated subject. The only money related involvement that most home maker mothers have had is with respect to the monthly petty cash they handle. While it seems like a rather tiny part of family finances, most mothers have again demonstrated a great amount of adeptness at that. If you have not given this a thought, it is time you go back and ask your mother how she planned her monthly “kharcha” and “bachat”. In most cases, she will also map out her savings to the various deployment needs that she had well planned for in advance.

Why then is “money” still a male dominated domain? I have been interacting with people, both men and women through various online platforms. The level of participation that I witness from the female community is shamefully low as far as India is concerned.

Do women refrain from taking an active role in personal finance? Or have they been unintentionally not involved enough by the male community? My view is, partly both.

This fact has remained this way for decades now. Yet the existence of this fact is far more dangerous now than ever before. A couple of situations that I iterate below are reasons why women need to prioritize their involvement in decisions around personal finance:

  1. The absolute number of women in the Indian workforce has been increasing. Handling the monthly petty cash is not the only money they need to manage.
  2. Working women tend to work for lesser number of years as compared to their male counterparts. This is on account of maternity and family priorities. This means that their quantum of savings could to be lower than their male counterparts. However, that does not reduce the money they will need to fund their own retirement.
  3. Women usually have a life expectancy greater than that of men. So they need to plan for longer number of retirement years.
  4. A lot more women are becoming socially independent. This results in a difference in priorities and preferences even between married couples. Financial planning of the family therefore needs the wife to be as involved as the husband.
  5. When young, we generally do not foresee unfortunate situations in life. A women who is suddenly divorced or widowed could end up in an extremely struggling situation, if she has no involvement in family finances

And these are just some of the many reasons. Times are indeed changing and we do have a few female clients who play a very active role in financial decision making (Read more here). However, they are still a very few. It is time that men and women assume equal responsibility to play a more inclusive role in defining the individual and collective goals, manage cash flows and draft out an implementable financial plan.

CAGR For Her is an initiative aimed at bringing more women into main stream decision making around personal finance. It is about mentoring, coaching and guiding women to play a more inclusive role in financial planning for the family. My aim is to simplify complexities and talk personal finance in a language that is relevant for today’s women.

In case you wish to have a chat, contact me on the below coordinates:
Email: shruti.agrawal@cagrfunds.com
Phone: +91 98670 954324