Mortgage loans are offered by the majority of lenders. These loans allow the applicants to get finance from lenders by offering their property as collateral. The highlights of these loans are
Nature of loan
Term loan (long term loan)
Amount of loan
40%-60% of the value of the property depending on the lender guidelines
Rate of interest
Starting from 7% approximately
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.
Additional Reading: 6 Tips to Get Approved for a home mortgage/loan
Key features of mortgage loan offered by HDFC Bank are:
- This loan comes in two variants namely, adjustable-rate home loan and TRUFIXED home loan.
- A borrower can mortgage commercial or residential properties to avail of this loan.
- HDFC bank offers mortgage loans against freehold and fully constructed commercial or residential properties.
- The loan can be borrowed by salaried or self-employed individuals.
- Application for this loan can either be made individually or jointly along with a co-applicant.
- Repayments must be made on a monthly basis for a tenure of up to 15 years.
- For an existing HDFC customer, 60% of the property’s market value is taken as the maximum margin.
- New HDFC customers can have a maximum margin of 50% of the property’s value.
- The bank offers mortgage loans with hassle-free documentation and minimal formalities. The bank also ensures quick disbursal of the loan.
Key features of mortgage loan offered by ICICI Bank are:
- To avail ICICI bank’s mortgage loan, you can set aside commercial or residential properties as a mortgage.
- This loan is available for personal as well as business needs including business expansion, working capital needs, etc.
- 90% of this loan can be sourced via an overdraft.
- For doctors, 70% of the property’s market value can be sourced as the loan amount.
- Salaried individuals, self-employed people, and employees of ICICI can borrow this loan, with reasonable interest rates.
State Bank of India
Key features of mortgage loan offered by SBI Bank are:
- The SBI mortgage loan is available against residential and commercial properties.
- One of the loan eligibility criteria is the rental income of the applicant.
- Employed individuals, professional, or self-employed people can borrow this loan. NRIs who have registered properties under their name can also borrow this loan.
- 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.
- The minimum loan tenure is 5 years and the maximum is 15 years.
- The applicant’s monthly income must be a minimum of Rs. 25,000 (Rs.3 lakhs yearly).
- The interest rate is calculated and charged using the daily reducing balance method.
Key features of mortgage loan offered by Axis Bank are:
- Axis Bank mortgage loans can be borrowed against residential and commercial property. It is also available for the purchase of a commercial property.
- There are three categories available including Asset Power, Dropline Overdraft Against Property/Commercial OD against Property, and Lease Rental Discounting.
- An existing loan can be transferred to Axis Bank to avail of this loan.
- The minimum loan amount available under all three categories of mortgage loans is Rs.5 lakhs and the maximum is Rs. 5 crores. The maximum tenure is 20 years for Loan Against Property, Lease Rental Discounting is available for 9 years and Overdraft Facility Against Property is for 10 years. The Reverse Mortgage Loan tenure is 20 years.
- This loan can be availed by salaried individuals and also self-employed individuals.
- Here is the list of self-employed individuals who can apply for this loan:
- Management consultants
- Chartered accountants
- Cost accountants
- Company secretary
Additional Reading: Types of Mortgage Loans
Key features of mortgage loan offered by Citi Bank are:
- The Citibank Loan mortgage loan can be availed against residential and commercial property.
- A maximum loan amount of Rs. 5 crores can be availed for residential property and up to Rs.3 crores for commercial property.
- The two variants available are —Home Credit Vanilla and Home Credit Fast Track.
- The repayment tenure for this loan is set at 15 years.
- Here are the various purposes for availing of this loan:
- Children’s education
- Settling existing debts
- Purchasing machinery
- Additional business or personal needs
- For buying a new property
Key features of mortgage loan offered by HSBC Bank are:
- The mortgage scheme offered by HSBC can be availed by offering a residential property as collateral.
- The bank processes applications for this loan within five days of furnishing all the needed documents. An additional timeline of three days is required for the evaluation of the property.
- In normal scenarios, the bank disburses the loan amount within two days of submitting the final loan agreement.
- The maximum amount under this loan is set at Rs. 10 crores and the loan has a tenure of 15 years.
- The bank ensures a simple and hassle-free process and formalities in this loan.
- Borrowers can enjoy free access to HSBC ATMs. Five free transactions can be availed per month at other banks’ ATMs.
- The withdrawal limit is set at Rs. 25,000 at HSBC ATMs. The purchase limit is Rs. 40,000 at select merchants.
PNB Housing Bank
Key features of mortgage loan offered by PNB Housing Bank are:
- The mortgage scheme offered by PNB requires pledging of immovable residential or commercial property.
- Here are some of the reasons for which this loan can be availed:
- Children’s marriage
- Medical expenses
- Expensive consumer durables
- Expansion of business
- Home renovation
- Travelling overseas
- 60% of the property’s market value can be sanctioned as the loan amount.
- Salaried or self-employed individuals are eligible for the loan.
Mortgage loans are cost-effective since these can be availed for a longer duration and repayment can be made with smaller monthly EMIs. Mortgage loans also come at lower rates of interest as compared to any other loans. One can apply for a mortgage loan from the bank’s official website or offline by visiting the nearest bank branch. Depending on the bank’s process, you will have to fill an online application form and furnish the required details.
1. What is the tenure of a loan against property?
The average tenure for a loan against property is approximately 15 years to 20 years.
2. Can a commercial property be used under mortgage loans?
Yes. Commercial property can also be used as collateral for mortgage loans.
3. What is the average loan amount that can be available under loan against mortgage?
The average loan value received under a loan against property is between 40% to 60% of the property value. In some cases, the loan value that can be sanctioned is up to 70% of the property value.
4. Who is eligible for a loan against property?
Salaried and self-employed applicants are eligible for loans against property.
5. Can a borrower transfer their existing loan against property from one lender to another?
Yes. The majority of lenders allow the transfer of existing loans against the property from one lender to another at nominal costs.