RBI Rate Cut: For Women Home Buyers, It Is The Best Time To Buy Homes

In traditional Indian culture, women are considered to be the 'Lakshmi' of a home, the Hindu deity believed to bring prosperity and good luck. The tradition has evolved with the times. Today, women represent more than just Lady Luck; a number of modern and independent Indian women increasingly earn a living for themselves and have climbed up the corporate ladder to become successful in their careers. With financial independence, women today are capable of owning a house. Banks too are promoting home ownership among women by offering a variety of interesting home loan deals to women.

Special deals for women

Many top banks in India have special home loan deals for women with lower interest rates. The State Bank of India (SBI) and ICICI Bank have been known to provide the cheapest of home loans. SBI offers home loans for women under a scheme called 'Her Ghar'. As per the scheme, a loan can be bought at an interest rate of 9.70% -- at this rate, the EMI would be Rs 867 per lakh for a period of 30 years.

However, there are terms and conditions one has to agree to in order to avail the loans. The woman applying for the loan should be the sole applicant or first co-applicant and the property to be financed should be either in the sole name of the woman borrower or she should be the first owner if it is a joint ownership. Another major bank, ICICI, also offers home loans for women to fulfill their dream of buying property in India at the same interest rate as SBI at 9.70%. ICICI Bank also offers repayment tenure of 30 years. The interest rate is fixed for the first 10 years and after that, there is a choice of fixed or floating interest.

RBI leads the way to women's empowerment

The Reserve Bank of India (RBI) announced its First Credit policy for the new fiscal and after negotiating with several banks, the interest rates have been slashed heavily. RBI cut its Repo Rate, which is the rate at which it lends money to commercial banks, by 0.25% or 25 basis points in January and then again in March and June by 25 basis point each. SBI acted quickly and reduced its base rate to 9.85% and then to 9.70%. HDFC Bank, another big name among banks operating in India, has also decided to cut its interest rates. HDFC Bank cut down its home loan interest rates by five basis points, bringing its rate as low as those of SBI and ICICI, at 9.85%. Axis Bank has also reduced interest for home loans for property in India by 20 basis points to 9.95%, which is slightly more than the interest rate offered by ICICI, SBI and HDFC, but is still profitable.

Realty market ripe for women investors

With the interest rate cuts, buying homes has become easier for women than ever. Let's see how much money these rate cuts actually help save while investing in a residential project in India. If you take a home loan of Rs 15 lakh and agree to pay it over 20 years, the EMI (equated monthly instalment) would be Rs 14, 376. With the interest rate cuts, the maximum rate in effect is 9.9% per annum. In contrast, going by the older interest rate of 10.15%, EMI for the same amount of loan would have been Rs. 14, 625.