Women availed bigger home loans in FY21: report

Indian women availed themselves of bigger home loans in FY21 amid the pandemic, according to a report titled Home Loan Refinancing in 2021 by BankBazaar.com, an online marketplace for financial products. The report says the average ticket size among female borrowers saw an increase of 7.4% in FY21. This increase can be an outcome of the pandemic; the changing work culture necessitated an increase in space and privacy, especially in homes where both partners work, leading to a preference for bigger houses, said the report.

The ticket size of home loans disbursed via BankBazaar also increased from ₹26.5 lakh to ₹27.3 lakh in FY21. Consequently, the average ticket size for loans where women were the primary applicants went up to ₹32 lakh compared with the overall average ticket size of ₹27.3 lakh. This can be attributed to a sharp fall in lending rates, enabling borrowers to take bigger loans at the same salary.

Moreover, the BankBazaar Aspiration Index report said that owning a house of their own has become the most important goal for Indians between the ages of 23 and 45.

“Buying a home is a once-in-a-lifetime opportunity for most people, and it is natural to want a house that meets all your expectations. However, problems occur when the costs go up trying to meet those requirements. The lenders will not lend to you beyond a point, typically 80% of the house value. Even then, if the projected equated monthly instalments (EMIs) for the loan goes beyond 40% of your net monthly income, you may not get the expected loan amount,” said Adhil Shetty, chief executive officer, BankBazaar.com.

In such a scenario, opting for a home loan jointly with your spouse can increase your eligibility. This is because the joint incomes would be considered for sanction of the loan. Moreover, where women are the first applicant, loans are 5-10 bps (1 bps is 0.01%) cheaper. So, the interest rate and, consequently, the EMI on your loan could be lower. This also means you can opt for a more extensive or more expensive property if your spouse and you apply as co-borrowers. Moreover, both of you can claim tax breaks against the home loan EMIs as the loan is in both your names. So, as a joint holder, you both can claim ₹3 lakh under Section 80C and ₹4 lakh under Section 24 of the Income Tax Act.

While taking a joint home loan, the liability to repay the outstanding loan falls on both the primary borrower and co-applicant. Hence, there is reasonably less burden on the borrower.