When you take a loan by putting your property as collateral, it is known as a mortgage loan. The property could be your home, a shop, or even non-agricultural land. A mortgage loan may be taken from any type of lender, from banks to non-banking finance companies.
Your property remains in the lender's custody until you repay the loan in full, i.e., the lender has a legitimate claim to the property for the duration of the loan. In case you fail to repay the loan, the lender has the right to seize your property and sell it at auction to retrieve the loan amount.
The lender provides you with the principal amount and charges you interest on it, and you can repay in affordable monthly installments. Here we will discuss mortgage loans, their features, types, and the best bank to apply for this type of loan.
Mortgage loans are a good choice because they have low interest rates and are fairly easy to acquire. As they are secured loans, you don’t need to jump through too many hoops to apply for them.
The different types of mortgage loans are as follows -
Fixed-rate mortgages are offered to customers at a fixed interest rate. In these types of loans, the fixed interest rate can be used to calculate the monthly payment amount, giving the customer a fair sense of what his or her debt will be.
Variable-rate mortgage loans are loans that are offered at variable rates of interest. The interest rate of these loans depends on the base rate of the lender, the repo rate of the RBI, the economy, and the stock market.
The interest rate is fixed for the initial period of the Adjustable-rate Mortgage loan. Thereafter, it changes depending on the state of the economy.
The higher the economy's performance, the lower this rate becomes. While banks offer a discount rate of interest for the initial period, they charge a higher processing fee.
A simple mortgage loan is one where the property does not transfer from lender to borrower but the lender has the right to sell the borrower's property if he or she fails to pay back the loan.
Usufructuary mortgages allow the borrower to sell the property to the lender for an income that can then be used to compensate both principal and interest on the loan.
A subprime mortgage loan is extended to individuals with a low credit score; hence, it comes with a higher interest rate. The high rate of interest protects the lender in case the borrower defaults on the loan.
Under the English mortgage, the borrower consents to give the lender complete ownership of their property if they are unable to make their loan payments by a specific date. The property is again given to the borrower after the full sum has been paid.
Mortgage loan interest rates in India depend on the lender offering the loan. We have compiled a list of the best banks for mortgage loans in India.
|
Bank |
Interest Rate |
Processing Fee |
|---|---|---|
|
10.60% to 12.25% |
Up to 2% of the loan amount |
|
|
9.25% to 10% |
Up to 1% of the loan amount or ₹10,000, whichever is higher + GST |
|
|
9% to 13.40% |
2% of the loan amount + GST |
|
|
8.50% to 13.50% |
3% of the loan amount |
|
|
9.70% to 11.55% |
Contact LIC Housing Finance for more information |
|
|
8% to 20% |
3.54% of the loan amount (inclusive of taxes) |
|
|
9.50% onwards |
Up to 2% of the loan amount + GST |
|
|
Contact IIFL for more information |
Up to 2% of the loan amount |
|
|
9% to 17% |
Up to 3% of the loan amount |
|
|
9.55% to 12.10% |
1% of the loan amount, minimum ₹5,000 and maximum ₹1 Lakh (excluding taxes) |
|
|
8.45% onwards |
1% of the loan amount or ₹10,000, whichever is higher |
|
|
10% onwards |
Contact Indian Overseas Bank for more information |
Please note: The interest rates and processing fees are as mentioned on the bank websites on 16 July 2025. Please get in touch with your bank before applying for a loan.
A mortgage loan has many features and benefits. Some of them are -
Lenders prefer fully constructed properties and have the right to reject a property
Property used as collateral needs to have commercial value and be a freehold property, which means it can be transferred to a new owner
Mortgage loans come with lower interest rates and longer tenures, lasting decades in a few cases, with flexible repayment terms
You can customize your mortgage loan according to your needs
During the course of repaying the loan, you remain the legal owner of your property
The features and benefits differ from bank to bank. Contact the lender for more details on mortgage loans.
The exact eligibility criteria will be defined by the bank you choose. Here are some basic criteria that may be common between most lenders -
Applicants must be between 21 and 65 years of age
Applicants must meet the minimum monthly income criteria
They must be an Indian citizen
Should have a good credit history and a credit score of 750 or above (You can get a loan even if your credit score is low, but you will have to pay a higher interest rate)
A duly filled and signed copy of the application form
Proof of identity documents such as a passport, Aadhaar, PAN, Voter ID, etc.
Proof of address such as Aadhaar, Passport, Driver's License, Voter ID, etc.
Form 16
Salary slips for the last 6 months (for salaried applicants)
Bank statements for the last 6 months
Income Tax Return documents for the last 2 years (for self-employed applicants).
Proof of business existence and certificate of business (For commercial borrowers).
Apart from the documents mentioned above, lenders might ask you for additional documents depending on their eligibility criteria, the loan amount, your overall profile, etc.
Please contact the lender directly to get an idea of the documents that you will need to submit along with your mortgage loan application.
As with any loan, you have to bear in mind that availing a loan is a liability that you have to pay back within the mentioned period. Some of the points that you would have to pay attention to are:
Although a mortgage loan may be available on a lower credit score, non-payment of EMIs regularly can further drag your score down.
Mortgage loans are big-ticket loans, so they may restrict your ability to avail of loans in the future.
If you do not pay back your loans on time, you may end up losing your mortgaged property.
Mortgage loans are loans given against property and are secured in nature. These loans are cost-effective, customizable, and hassle-free. The mortgage loan amount has no restrictions on the end use, and the borrower can use the funds as they deem fit.
Want to get a loan against your property in a hassle-free manner? Head over to the Moneyview website or app and get a loan from our lending partners.Yes, you can get a mortgage loan through the Moneyview website or app. You can get up to ₹15 Crore at interest rates starting from 9% p.a.
The difference between mortgage amortization and the term is that amortization is the time you will take to repay the full loan, and the term is the period for which your rate of interest and mortgage agreement will be effective. The term is a part of amortization.
Prepayment is allowed on mortgage loans. However, some banks charge a small fee for the pre-closure of the loan.
No. It is not mandatory to have a co-applicant. However, it has several benefits.
Co-signer/co-applicant requirements vary from one lender to another. Contact your lender to know who can be your co-signer on the mortgage.
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