Indian women resorted to larger home loans in FY21 amid pandemic, report says Mortgage refinancing in 2021 by BankBazaar.com, an online marketplace for financial products. The report states that the average note size among female borrowers increased by 7.4% in fiscal year 21. This increase may be the result of the pandemic; changing work culture has required an increase in space and privacy, especially in homes where both partners work, leading to a preference for larger homes, according to the report.
The ticket size of mortgage loans disbursed through BankBazaar has also increased from ₹26.5 lakh to ₹27.3 lakh in FY21. As a result, the average ticket size for loans for which women were the main applicants increased to ₹32 lakh compared to the overall average size of banknotes ₹27.3 lakh. This can be attributed to a sharp drop in lending rates, allowing borrowers to take out larger loans for the same salary.
Additionally, the BankBazaar Aspiration Index report indicates that owning a home has become the most important goal for Indians between the ages of 23 and 45.
“Buying a home is a unique opportunity for most people, and it is natural to want a home that meets all of your expectations. However, problems arise when costs increase in trying to meet these requirements. Lenders won’t lend you beyond a certain point, typically 80% of the home’s value. Even then, if the expected loan equivalent monthly payments (EMIs) exceed 40% of your net monthly income, you may not get the expected loan amount, ”said Adhil Shetty, CEO of BankBazaar.com.
In such a scenario, opting for a home loan together with your spouse may increase your eligibility. This is because the common income would be considered for the sanction of the loan. In addition, when women are the first applicants, loans are 5-10 basis points (1 basis point corresponds to 0.01%) less expensive. So the interest rate and therefore the EMI on your loan could be lower. It also means that you can opt for a larger or more expensive property if you and your spouse are applying as co-borrowers. Additionally, you can both claim tax breaks on mortgage IMEs because the loan is in both of your names. So, as a joint owner, you can both claim ₹3 lakh under section 80C and ₹4 lakh under section 24 of the Income Tax Act.
When taking out a joint mortgage loan, the responsibility to repay the outstanding loan lies with both the primary borrower and the co-applicant. Therefore, there is reasonably less burden on the borrower.
Never miss a story! Stay connected and informed with Mint. Download our app now !!