Loan against property (mortgage loan) is an attractive loan option where the loan is provided against an existing property by using it as collateral. The loan amount can be up to 60% of the property value at nominal interest rates.
What are mortgage loans? (Loans against Property)
Mortgage loans are most commonly referred to as loans against property in India. It can be availed by both salaried and self-employed individuals to fulfil various personal or business-related needs. As the name suggests, this loan requires the mortgaging of property. In simple terms, a mortgage loan is available by pledging one’s property.
Mortgage loans are generally available at interest rates ranging from 8.15% to 11.80% p.a. The amount of loan one can avail is normally up to 60% of the registered value of the property. Some banks offer up to Rs.10 crores in mortgage loans provided certain pre-conditions are met. The maximum repayment tenure for mortgage loans is generally around 15 years.
Popular Mortgage Loan Providers in India
Let’s look at some of the top mortgage loan providers in India.
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HDFC Bank
Key features of mortgage loan offered by HDFC Bank are:
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This loan comes in two variants namely, adjustable-rate home loan and TRUFIXED home loan.
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A borrower can mortgage commercial or residential properties to avail of this loan.
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HDFC bank offers mortgage loans against freehold and fully constructed commercial or residential properties.
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The loan can be borrowed by salaried or self-employed individuals.
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Application for this loan can either be made individually or jointly along with a co-applicant.
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Repayments must be made on a monthly basis for a tenure of up to 15 years.
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For an existing HDFC customer, 60% of the property’s market value is taken as the maximum margin.
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New HDFC customers can have a maximum margin of 50% of the property’s value.
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The bank offers mortgage loans with hassle-free documentation and minimal formalities. The bank also ensures quick disbursal of the loan.
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ICICI Bank
Key features of mortgage loan offered by ICICI Bank are:
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To avail ICICI bank’s mortgage loan, you can set aside commercial or residential properties as a mortgage.
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This loan is available for personal as well as business needs including business expansion, working capital needs, etc.
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90% of this loan can be sourced via an overdraft.
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For doctors, 70% of the property’s market value can be sourced as the loan amount.
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Salaried individuals, self-employed people, and employees of ICICI can borrow this loan, with reasonable interest rates.
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State Bank of India
Key features of mortgage loan offered by SBI Bank are:
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The SBI mortgage loan is available against residential and commercial properties.
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One of the loan eligibility criteria is the rental income of the applicant.
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Employed individuals, professional, or self-employed people can borrow this loan. NRIs who have registered properties under their name can also borrow this loan.
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The minimum loan amount available under SBI Loans Against Property is Rs. 10 lakhs. The maximum amount is Rs.7.5 crores depending on the location of the property.
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The minimum loan tenure is 5 years and the maximum is 15 years.
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The applicant’s monthly income must be a minimum of Rs. 25,000 (Rs.3 lakhs yearly).
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The interest rate is calculated and charged using the daily reducing balance method.
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