With a mortgage loan, you pledge your property as collateral to secure the loan. Mortgage loan interest rates range from 8.15% to 11.80% p.a.
The amount of funding you can often get is up to 60% of the property’s registered value. Mortgage loans up to Rs. 10 crore are also provided by several banks.
For mortgage loans, the payback period may last up to 15 years.
Interest Rates for Mortgage Loans Offered by Different Banks
| Lender | Interest Rate | Loan Amount | Loan Tenure |
| HDFC Bank | 8.75% Onwards | Up to 60% of the mortgaged property’s market value | Up to 15 years |
| ICICI Bank | 9.40% Onwards | Up to Rs.5 crore | Up to 15 years |
| State Bank of India (SBI) | 1.60% above 1-year MCLR rate to 2.50% above 1-year MCLR rate | MCLR rate Up to Rs.7.5 crore | Up to 15 years |
| Axis Bank | 10.50% Onwards | Up to Rs.5 crore | Up to 20 years |
| Citibank | 8.15% Onwards | Up to Rs.5 crore | Up to 15 years |
| HSBC Bank | 8.80% Onwards | Up to Rs.10 crore | Up to 15 years |
| PNB Housing Finance | 9.80% Onwards | Up to 60% of the property’s market value | Up to 15 years |
| IDFC Bank | Up to 11.80% | Up to Rs.5 crore | Up to 15 years |
| Karur Vysya Bank | 10.00% Onwards | Up to Rs.3 crore | Up to 100 months |
| Union Bank of India | 9.80% Onwards | Up to Rs.10 crore | Up to 12 years |
| IDBI Bank | 10.20% Onwards | Up to Rs.10 crore | Up to 15 years |
| Oriental Bank of Commerce | 10.95% Onwards | Up to Rs.10 crore | Up to 10 years |
| Federal Bank | 10.10% Onwards | Up to Rs.5 crore | Up to 15 years |
| Corporation Bank | 10.85% Onwards | Up to Rs.5 crore | Up to 10 years |
| Vijaya Bank | Contact the bank for details | Up to Rs.5 crore | Up to 10 years |
HDFC Bank
Benefits:
- This loan has two lending options: a 2-year TRUFIXED Home Loan and an Adjustable Rate Home Loan.
- This loan is available against freehold and fully constructed commercial and residential properties.
- This loan is available for both salaried and self-employed individuals.
- You can either apply for the loan individually or jointly with a co-applicant.
- You can make payments on a monthly basis for up to 15 years.
- A maximum margin of 60% of your property’s market value would be given to current HDFC clients.
- New HDFC customers will get a maximum margin of 50% of the property’s market value.
- The documentation is hassle-free with minimal requirements and you can expect a quick disbursal of the loan.
Penalties:
- Any missed interest or EMI payments will result in an extra 24 percent p.a. in interest charges.
- A fee of up to Rs. 500 will be assessed if your loan term is extended or contracted. This sum does not include any applicable taxes.
- The following are the pre-payment fees for loans approved with a business, firm, single proprietorship, or HUF as the applicant:
- Prepaid loans within the first six months will incur a 2 percent fee in addition to taxes and other fees.
- If 25% of the loan is paid off within six months and within 36 months, there are no prepayment penalties.
- If the loan is repaid after 36 months, there are no prepayment fees.
ICICI Bank
Benefits:
- You may apply for this loan to cover personal or company expenses like children’s education, vacations, business growth, equipment purchases, and long-term working capital.
- You can get up to 90% of this loan as an overdraft.
- If you’re a doctor, you can get up to 70% of your property’s market value as the loan.
- Salaried, self-employed, and employees of the ICICI Group and Infosys can apply for this loan, with varying interest rates for each category.
Penalties:
- There are no charges for part pre-payments.
- Late payments will attract a fee of 2% per month.
- Following are the conversion charges for this loan:
- Floating to floating – 0.5% of the outstanding plus applicable taxes
- Dual fixed rate to floating – 0.5% of the outstanding plus applicable taxes
- Floating to dual fixed rate – 0.5% of the outstanding plus applicable taxes
- Lifetime fixed to floating – 1.75% of the outstanding plus applicable taxes
State Bank of India(SBI)
Benefits:
- Your rental income may also be taken into account for loan eligibility.
- Anyone who is working, in a professional capacity, or self-employed is eligible for this loan. This loan is available to NRIs as well who own real estate in their own names or the names of members of their close relatives.
- You can borrow as little as Rs. 10 lakh and as much as Rs. 7.5 crore through SBI Loans Against Property, depending on the property’s location.
- The minimum and maximum tenor of the loan is 5 years and 15 years respectively.
- Your monthly income has to be a minimum of Rs.25,000 (Rs.3 lakh annually).
- The interest rates on your loan are charged using the daily reducing balance method.
Penalties:
- For every returned check, dishonoured ECS, or returned SI, you will be charged Rs. 250.
- Any payment delays will result in a penalty interest charge of 2% per year on the amount that is past due.
Axis Bank
Benefits:
- Asset Power, Dropline Overdraft Against Property/Commercial OD Against Property, and Lease Rental Discounting are the three options.
- You can transfer your existing loan to Axis Bank as well.
- The Asset Power (Loan Against Property), Lease Rental Discounting, Reverse Mortgage Loan, and Overdraft Facility Against Property all have minimum and maximum loan amounts of Rs. 5 lakh and Rs. 5 crore, respectively. The maximum tenure for Loan Against Property is 20 years, while that for Lease Rental Discounting is 9 years, Overdraft Facility Against Property is 10 years, and Reverse Mortgage Loan is 20 years.
- Salaried individuals, self-employed individuals, and self-employed professionals can apply for this loan.
- A 40% to 50% margin is granted for a loan against your commercial or residential property.
- A 20% to 30% margin is granted for a loan to purchase a commercial property.
- The loan can be sanctioned in five days.
- Eligible for this loan:
- Chartered accountants
- Doctors
- Architects
- Engineers
- Cost accountants
- Dentists
- Management consultants
- Company secretary
Penalties:
- If there are any overdue instalments, you’ll be charged a penal interest of 24% p.a., which equals to 2% per month.
- Bounced cheques will attract a fee of Rs.500 per instance.
- Switching your interest rate from a higher floating rate to a lower floating rate will attract a 0.5% charge on the outstanding principal.
Citibank
Benefits:
- You can use your residential or business property as collateral for the Citibank Loan Against Property.
- For residential properties, you can receive up to Rs. 5 crore, and for commercial properties, up to Rs. 3 crore.
- Home Credit Vanilla and Home Credit Fast Track are the two variations offered by this programme.
- The loan’s maximum term for repayment is 15 years.
- Up to 70% of the market value of your property may be approved as a loan.
- You can apply for this loan:
- Children’s education
- Purchasing new property
- Purchasing machinery
- Clearing existing debts
- Other business or personal needs
- Located for this loan:
- Ahmedabad
- Bangalore
- Chennai
- Delhi/NCR
- Hyderabad
- Jaipur
- Kolkata
- Mumbai
- Pune
- Coimbatore
- Chandigarh
- Surat
Penalties:
- For this loan, you must pay a booking fee of up to Rs. 5,000. This information is gathered throughout the loan application procedure.
- Any bounced check, NACH, or SI will be charged a fine of Rs. 500.
- If you don’t make a payment for a certain month, you’ll be assessed a 2% penal interest fee on top of the regular interest rate.
HSBC Bank
Benefits:
- By using your residential property as collateral, you can secure the HSBC Smart Loan Against Property programme.
- After receiving all the required documentation, the application will be processed in five days. A further three days will pass before your property is evaluated.
- Once your paperwork have been received, processing the loan will take four days, and the money will be disbursed within two days of receiving the fully signed loan agreement.
- The highest loan amount you may obtain is Rs. 10 crore, and the loan’s maximum term is 15 years. The paperwork procedure is easy and hassle-free.
- You enjoy free unlimited access to HSBC ATMs and five free transactions per month at other banks’ ATMs.
- You get a withdrawal limit of Rs.25,000 at HSBC ATMs and a purchase limit of Rs.40,000 at various merchants.
Penalties:
- A conversion fee of 0.50% of your outstanding limit plus any additional applicable taxes will be charged if you change the type of loan you have.
- For each late instalment, you will be penalised Rs. 250 if your check bounces or you fail to honour the SI.
- If you don’t make your monthly payments, a 2% penalty interest will be added to your current interest rate.
- A non-utilisation fee of up to 1% is assessed for sums that are greater than 25% of your sanctioned loan.
PNB Housing Finance
Benefits:
- To be eligible for the PNB Housing Loan Against Property scheme, pledge your immovable residential or commercial property.
- The sanctioned loan amount is up to 60% of the market value of your property.
- To qualify for the loan, you must be a salaried, independent, or professional worker.
- The sanctioned amount:
- Education
- Medical expenses
- Children’s marriage
- Home renovation
- Purchase of high-cost consumer durables
- Expansion of business
- Travelling overseas
Penalties:
- You will be charged Rs. 250 plus any applicable GST for each inspection of your property.
For regular accounts, this will happen at least once a year; for irregular accounts, it will happen once every six months; and for NPA accounts, it will happen once every three months.
IDFC Bank
Benefits:
- LAP Simple and LAP Short Sweet are two different forms of loans against property offered by IDFC Bank.
- While the LAP Simple is a fairly simple loan, the LAP Short Sweet offers advantages akin to those of a savings or current account.
- The money from the LAP Short Sweet programme can be used as an overdraft facility. This enables interest savings.
- Both variations’ documentation is brief and easy to understand.
- For the LAP Simple variation, you can boost your loan eligibility by include the income of your family members.
- To boost your loan eligibility for the LAP Short Sweet variation, you can add co-applicants.
Penalties:
- You will be billed Rs. 500 for each returned EMI.
- On any missed payments for one month, a 2% penalty interest will be applied.
- There is a 0.5% cost for switching your loan to a different option.
- Individual borrowers are not responsible for any expenses associated with the foreclosure of their fixed-rate or floating-rate loans.
Union Bank of India
Benefits:
- The approved loan amount may be used to cover a variety of costs, both personal and business-related.
- If you live in India, you may be eligible for a loan of up to Rs. 10 crore.
- Farmers are eligible for up to Rs. 1 crore, and NRI candidates are eligible for up to Rs. 5 crore.
- The term loan facility is exclusively available to salaried people.
- Individuals who are not paid a salary have access to overdraft and term loan options.
Penalties:
- You will be charged a 2% penalty fee on the average sum from the previous 12 months if this loan is taken over by another bank or financial institution.
IDBI Bank
Benefits:
- This loan can be used for a variety of personal or business requirements, such as medical costs, wedding or education-related fees, home improvements, home purchases, or business growth.
- The most you may borrow is Rs. 10 crore, and there are no restrictions on how long it takes to return the loan—up to 15 years.
- Your Flexi Current Account will be connected if you apply for LAPIs. You have the freedom to take out extra or unused funds that have been put in this account.
Penalties:
- The overdue sum and period will incur a 2% punitive interest fee.
- Your loan can be converted to another type for a fee of Rs. 10,000 + any applicable taxes.
Federal Bank
Benefits:
- There are term loans and overdraft facilities available under the Federal Bank Property Power programme.
- This loan is available to Indian residents, non-residents, and PIOs.
- To qualify for this loan, you can use your home, business, and/or plot as collateral.
- A balance transfer programme with additional funds is an option.
- There is a surrogate programme for self – employed.
- The loan is processed quickly, with little paper work needed.
Penalties:
- You will be charged a 2% penal interest rate on the overdue amount.
- Switching a loan from fixed to floating rate and vice versa attracts a conversion fee of 0.25% of the outstanding balance.
Corporation Bank
Benefits:
- Your home, business, industrial property, land, or structure can be used as collateral to obtain the Corp Mortgage Scheme.
- Companies, HUFs, Trusts, partnership firms, and NRIs may all apply for this loan.
- The loan may be utilised for either personal or professional needs.
- Your loan amount will be determined by the location of your property, which can be in a metro area, a port town or urban centre, a semi-urban centre, or a rural centre.
Vijaya Bank
Benefits:
- Every person between the ages of 21 and 65 is eligible for the scheme.
- Salaried
- Professional
- Self-employed
- Proprietorship
- Businessmen
- LLPs
- Companies
- Up to 48 months of your typical gross salary can be borrowed against.
- You will be required to provide collateral equal to 70% of the market value of your property.
- You cannot use industrial or agricultural property as collateral for this loan.
Mortgage Loan Eligibility Requirements
You must meet the requirements for eligibility set forth by banks and other financial institutions in order to be approved for a mortgage loan.
Although the requirements may differ from bank to bank, the following are the standard elements that establish your eligibility:
- Gross annual/monthly income
- Minimum age requirement of 21 years
- Valuation of your property
- Income proof documentation
- Existing liabilities
- Number of dependants
Documentation Required
The documentation required for the loan application varies based on your employment status i.e., self-employed or salaried.
The following documents may be required of you if you are a salaried employee:
- Duly filled loan application form
- Passport-size photographs
- Identity proof (PAN card, Aaadhar card, passport, driving licence, voter ID card, etc.)
- Address proof (electricity bill, ration card, Aaadhar card, driving licence, rental agreement)
- Latest salary slips
- Form 16 issued by employer
- Latest bank statements
- Processing fee cheque
If you’re a freelancer or individual, you might need to provide the following paperwork:
- Duly filled loan application form
- Passport-size photograph
- Identity proof (PAN card, Aaadhar card, passport, driving licence, voter ID card, etc.)
- Business proof
- Financial statements for the last 3 years
- Latest income tax return certificates (last 3 years)
- Profit and loss statement (P&L)
- Latest bank statements
- Cheque for processing fee
Factors to Consider Before Applying for a Mortgage Loan
- Loan amount: Your residential or business property must be offered as security for a mortgage loan. The sanctioned amount is determined by the property’s metric value. The majority of banks and financial institutions have a 40–60% margin. The age and condition of the property are additional aspects that are taken into consideration.
- Interest rate: Depending on the lender, you may get interest rates anywhere between 11% to 15%. You can choose to get a floating rate loan or a fixed rate loan.
- Fees and charges: Among the costs you must consider are processing fees, paperwork fees, application fees, property inspection fees, loan overdue fines, late payment penalties, and loan conversion fees. Your loan’s cost may go up as a result of these costs.
- Tenure: The repayment period offered by lenders can go up to 15 years. However, if you’re choosing an overdraft facility for your mortgage loan, the tenure may be much lower.
- Repayment schedule: Additionally, this varies from bank to bank. Although the majority of banks provide an EMI option for the mortgage loan, there are additional repayment choices. This should be clarified with your lender before to applying for the loan.
- Criteria: The criterion for the loan changes on the type of employment, your residency status, your income, your age, among other factors. Always check the criteria with your lender before applying for the loan.
How to Apply for a Mortgage Loan?
Just on bank’s official website or at the nearby branch, you can apply online for a mortgage loan. Visit the lender’s website and select the product you want to apply for to start an online application. You can click “Apply Now” on the website if they accept online applications. You might need to complete and submit an online application form, depending on the procedure.
You can also go to the nearest branch, request for an application, and submit it along with the required documents.
Application process for a mortgage loan:
- Document collection to process the loan
- Credit appraisal by the bank
- Verification of personal/business information provided
- Sanction letter delivered via post and email post approval
- Request for disbursal
- Property documents collection
- Evaluation of your property and its documents
- Post successful verification, disbursement cheque delivered
Benefits of Mortgage Loan:
- It is a cost effective way of borrowing. Normally, you can take a mortgage loan for a longer duration and pay off your repayment by using smaller monthly EMIs.
- Mortgage loans charge lower rates of interest on your borrowings than any other loans.
- A secured loan is a mortgage loan. It is protected from your property. If you are unable to pay back your loan, the bank or lender has the authority to reclaim your property.
- You can buy a home with the aid of a mortgage loan. With the aid of this loan, you will be able to buy a home, and once repayment is complete, you will own it completely.
- You can get loans against under construction property, fully constructed property, freehold residential and commercial properties for:
- Get loan for a longer tenure.
- Repay your loan with a simple repayment process through monthly instalments. You can pay it off by paying smaller monthly EMIs.
- Mortgage loans are offered at attractive interest rates.
- Enjoy an easy and hassle free documentation process.
- You can get a mortgage loan anywhere in India with integrated branch network provided by banks.
- To pay off your loan, you can select from a variety of interest rates. These include interest-only mortgages, fixed interest rates, floating rates, and payment option ARMs.
- Get access to a higher amount of funds.
- Mortgage loan can be sectioned even before your select your property.
- You can apply for it both online and offline and enjoy doorstep services.
- Both residential and commercial properties are accepted as collateral for mortgage loan.
- Funds received from a mortgage loans can be used for business as well as personal needs.
- Self –employed individuals get customized loan options.
