Home loan rates are heading south once again. That’s the good news. The better news is that more lending institutions now offer special home loan rates for women borrowers.
Since we first talked about these special rates for women here, the home loan rates have come down from 10.50% to 9.45-9.90%. For women borrowers the rates have come down from 10.10% to 9.85%.
While ICICI Bank and State Bank of India have been offering differential rates for women since last year, HDFC Ltd has started offering special rates recently. For buying a new home, or improving the existing house, HDFC will charge 9.85%. The loan for purchase of plots will come at 9.90% for women.
Three leading lenders now offer home loans to women at 9.85% as compared to 9.90% offered to male borrowers.
Who can avail these loans? In order to avail these loans, three lenders have laid out different ownership conditions (see conditions below the table) which makes it feasible for working women to consider these loans. Housewives or women with no source of income may find it difficult to take advantage as the ICICI Bank and State Bank of India prescribe that the woman should be the main or the first applicant in the loan.
How much do you really save? Lets assume that you plan to take a home loan of Rs 50 lakh for 20 years and considering a 2% processing fees, the EMI would come out to…
|Equated Monthly Instalment (in Rs) For|
|State Bank of India*||47,755||47,920|
Conditions: *The woman should be the sole applicant or first co-applicant of Home Loan and also the property proposed to be financed should be either in the sole name of the woman borrower or she should be the first owner in case of joint ownership. **Woman has to be an owner or a co-owner of the property and an applicant/co-applicant to the loan.
***Woman borrower should be the main applicant to the loan and she should be either owner or co-owner in the property being financed.
So on a monthly basis, you pay Rs 165 less on your EMI as compared to a normal home loan rate. Over the loan tenure of 20 years, this saving lowers your interest component of the loan by Rs 40,000.
Gruhini Tip: Special rates are meant to catch our attention. No doubt you make little savings by availing these rates, but it doesn’t really lower your EMI burden drastically. So the decision to take a loan in your name shouldn’t be because of these rates only. Before you zero in on any of the lenders, consider the following things as well.
1.The Stamp duty registration rate: Few states like Haryana, Rajasthan and Delhi charge lower rate of stamp duty if woman is a co-owner of a property. So it makes sense to become a co-owner in the property and be a co-applicant in the loan and take advantage of special home loan rates as well as stamp duty rates.
2. The Non tangible clauses: The pre-payment clauses, the clauses for non payment of EMI payment (will it accommodate for an unforseen event like a loss of job). Check out the clauses under which you can pre-pay the loan or even if you are not able to pay, then how much leeway will the lender give you in case of any unforseen event.
Do write to us if you think these special rates really offer any extra benefit?