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Mortgage loan is a type of loan in which you pledge your property as security to raise funds. This loan is an excellent way to cushion your financial needs when it comes to fulfilling an array of purposes. This loan, also known as, loan against property, is offered by most banks and NBFCs at notably competitive rates starting at 8% and with friendly repayment options that range up to 20 years. In this section, you will come across the features, eligibility criteria and everything else you need to know about this loan. So, let’s get started.
|
Loan Amount |
Up to 60% of the value of property |
|
Interest Charges |
Start at 7.20% |
|
Processing Fees |
Up to 2% of the loan amount plus applicable taxes |
|
Tenure |
Up to 15-20 years |
|
Prepayment |
As per the bank’s discretion |
Here is what you need to know about loan against property:
Mortgage loan is an ideal way to deal with financial requirements. In this loan, you offer your property as collateral to the lender and gain finances. This loan proves to be a helping hand when it comes to backing your financial needs to fulfill various purposes. Banks and NBFCs accept both residential and commercial property as collateral.
The amount on Loan against property depends on the value of the property you are pledging. Lenders keep up to 50% to 60% of the property value as margin. The maximum offered by most banks and NBFCs goes up to Rs 10 crore. Besides that, there are many other factors including the eligibility and your relationship with the lender that determine the loan amount.
Mortgage loan interest rates vary from lender to lender. Usually, the interest rate offered by most banks and NBFCs start at 8% and they go up to 15%. Apart from that, your profile, repayment tenure and the type of rate (fixed or floating) are the prominent factors that determine the loan against property interest rate.
There’s relief with the repayment tenure when it comes to the mortgage loan. Lenders offer a slew of flexible loan against property repayment tenure options that range up to 15-20 years.
| Bank | Mortgage Loan Rate | Processing Fee |
|---|---|---|
| Axis Bank Mortgage Loan Rates | 10.50% | 1.00% (Max. Rs 10,000) |
| HDFC Mortgage Loan Rates | 8.25% | Min Rs. 9,999 |
| HSBC Mortgage Loan Rates | 9.80% | 1.00% (Max. Rs 10,000) |
| IDBI Mortgage Loan Rates | 10.20% | 1.00% |
| Indusind Bank Morgage Loan Rates | 9.00% | 2.00% |
| RBL Mortgage Loan Rates | 13.05% | 1.25% (Max. Rs 7,500) |
| SBI Mortgage Loan Rates | 8.80% | 1.00% (Max. Rs 50,000) |
| Yes Bank Mortgage Loan Rates | 10.50% | 1.00% |
These rates can vary depending upon the value of the property, your occupation and repayment capacity. Higher the loan amount, higher will be the rate of interest.
You have to make sure that you are up to the eligibility criteria for a mortgage loan. Banks and NBFCs check many eligibility factors such as age, income, employment status etc. to make sure you can avail this loan.
Here is the Mortgage loan eligibility criteria:
You are asked to provide certain documents that are required to be submitted for a mortgage loan application. Since documentation is an important part of the loan process, failing it can lead to the rejection of your application. Thus, you must make sure you have all the documents ready to provide along with the mortgage loan application.
Here are documents required for mortgage loan:
|
Documents |
Salaried Individuals |
Self Employed Individuals |
|
ID Proof |
Aadhar Card, Passport, Voter ID |
Aadhar Card, Passport, Voter ID |
|
Address Proof |
PAN Card, Driving Licence, Electricity Bill, Water Bill |
PAN Card, Driving Licence, Electricity Bill, Water Bill |
|
Income Proof |
Salary Slips, Bank Statements, Form 16. IT Returns |
Salary Slips, Bank Statements, Form 16. IT Returns |
|
Other Important Documents |
PAN Card, Passport-size Photographs |
PAN Card, Passport-size Photographs |
You can opt from the following methods to apply for mortgage loan:
Visit the nearest branch of the bank or NBFC to apply for the mortgage loan offline.
To apply for a mortgage loan online, you can visit the official website of the bank or NBFC.
There are many factors that need your attention before you apply for a mortgage loan. Let’s read about them ahead:
Loan amount is a crucial factor when it comes to the mortgage loan. The mortgage loan amount is determined by the value of the property that is being pledged. Most banks and NBFCs offer the loan amount ranging up to Rs 10 crore. The lenders keep a margin of up to 50% to 60% of the value of the property.
Interest rate is another thing to keep in mind before applying for a mortgage loan. Know that the mortgage loan interest rate varies from lender to lender and it usually ranges from 8% to 15%. Besides that, you should also take into consideration the type of interest rate that is best suited for you- fixed rate or floating rate.
One of the most prominent factors to take into account before applying for a mortgage loan is the loan repayment tenure. Long repayment tenure allows you to repay your loan in small instalments but the rate of interest levied on them is higher.
On the other hand, if you opt for a short repayment tenure, the payable instalment will be large. However, short repayment tenure costs less interest. Therefore, it is important to give this factor thought, keeping in mind your financial planning.
Your eligibility tells a lot about the rate of interest and loan amount you will be able to extract on a mortgage loan. The banks and NBFCs have certain eligibility standards designed to determine whether you qualify to get this loan or not.
The mortgage loan eligibility criteria include parameters such as your age, employment status, income, documentation etc. and the requirements also depend on the lender. Thus, it is crucial that you go through the criteria before finalising anything.
Then come the fees and charges and they play an important role in helping you find the best mortgage loan option. The processing fees, documentation fees, prepayment/foreclosure charges and many other types of fees and charges can help you compare different lenders and see which one is offering a cheaper loan.
The maximum loan amount offered by most lenders is Rs 10 crore. The mortgage loan amount which you can avail also depends on the property value and your eligibility.
The maximum repayment tenure for loan against property goes up to 15 years to 20 years.
Loan against property interest rates depend on the lender. The rates usually range from 8% to 15% and are also subject to applicant’s profile and repayment tenure.
You can use the following payment methods to repay your mortgage loan instalments:
Yes. Most lenders enable borrowers to prepay/foreclosure the mortgage loan. However, you should still get in touch with your lender and enquire about the loan against property foreclosure terms and conditions and charges.
You can offer the following types of property as collateral to the lender:
You can apply for a loan against property online or offline. To apply offline, you can visit the nearest branch of the bank/NBFC with the necessary documents. You can also apply online from the official website of the lender.
Last Updated on : 22/Apr/2021Know More About
You're eligible for a Mortgage Loan if you:
Are legally adult enough to handle it
Have still got it
Get a regular pay check
Make more than a basic buck
Your eligibility depends on:
Earn more than minimum income required
Maximum allowed Mortgage Loan is Rs. 10K to Rs. 45 lakhs
EMIs of other loans loweryour eligibility
Boost your eligibility by:
Pay off your credit card bills
Choose longer tenure loan up to 5 years
Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:
- 1. Photo ID and age proof
- 2. Signed application form with photograph
- 3. Residence proof
- 4. Last 6 months bank statement
- 5. Documentation for salaried applicants:
- Last 3 months salary - slips
- Form 16 or Income Tax Returns
- 6. Documentation for self-employed applicants:
- Last 3 years Income Tax Returns with computation of Income
- Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account
Updated on 25 Nov 2017
| Mortgage Loan Details | |
|---|---|
| Interest Rate (Monthly reducing balance) | 11% - 15% |
| Processing Fees | Varies with bank |
| Loan Tenure | 1 year to 15 years |
| Pre-closure Charges | Varies with bank |
| Guarantor Requirement | Varies with bank |
Mortgage Loan EMI Calculator