Home Loan vs. Mortgage Loan

A Home Loan is a secured loan that helps individuals finance the purchase of a property. The loan amount is repaid through EMIs over a specific tenure. The property being financed serves as collateral until the loan is fully repaid. Bajaj Housing Finance offers Home Loans at competitive interest rates, along with a tenure extending up to 32 years.

There are several different types of secured property loans in the market, and quite often, it may get confusing to pick the differences in each of them. For the sake of clarity, it must be made clear that even Home Loans are a type of mortgage loan; wherein the property for which you seek a loan is considered a collateral for the sanction. However, through this article, we establish the differences between Home Loans and Loans Against Property – which are commonly referred to as mortgage loans.

The purpose of demarcating the difference is to help borrowers make informed decisions about which loan type is correctly suited to their needs – helping them choose, and then proceed to apply for the right loan, knowing everything it entails.

Bajaj Housing Finance offers both loan types to interested applicants, depending on what their financial need is. Here are the differences between Home Loan and mortgage loan that we offer:

For a more detailed insight into interest rates attached to both loan types, click here.

Under the old tax regime, you can claim the following tax benefits:

Tax Benefits on Home Loans

• Section 22 allows a deduction on the interest paid towards your Home Loan. For a self-occupied property, you can claim up to Rs.2 Lakh per financial year.
• Section 123 provides a deduction of up to Rs.1.5 Lakh annually on the principal repayment component of your Home Loan.
• Section 130 offers an additional deduction of up to Rs.50,000 on the interest paid by eligible first-time homebuyers, subject to the prescribed conditions.

Tax Benefits on Loans Against Property

• You may claim deductions under Section 22 on the interest paid if the loan proceeds are used for the purchase or construction of a residential property.
• Interest paid on a mortgage loan may also qualify for deduction under Section 37(1) when the borrowed funds are used for business purposes or income-generating activities, subject to applicable tax provisions and regulations.

The right loan for you depends on your specific financial requirements. You can choose a Home Loan if your goal is to purchase a property at a competitive interest rate. Alternatively, if you need funds for purposes such as debt consolidation, business expansion, or meeting other financial needs, a Loan Against Property may be more appropriate.

While both Home Loans and Loans Against Property are secured loans, they are designed to serve different purposes and come with distinct features and benefits. Rather than comparing the two, it is important to choose the option that aligns with your financial objectives. Whatever your requirement, Bajaj Housing Finance offers financing solutions to help you meet your goals.

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