Mortgage Loans are loans granted to you against collaterals that are substantially valued – typically one’s property. These loans are secured in nature and offer benefits, such as sizeable loan sanctions, competitive interest rates, and extended repayment tenors.

In the case of a mortgage loan, the property ownership remains with the lender throughout the duration of the loan. Once you have repaid the loan with interest, the ownership transfers to you.

Mortgage loans can be a handy solution to many big-ticket expenses, such as buying a new house, bearing the costs of unforeseen medical bills, or even paying the tuition for your child’s overseas education.

When you seek a mortgage loan, you effectively receive the loan amount against the security of a property you have mortgaged as collateral. You can pledge a commercial or residential property and receive a sizeable sanction based on your property’s value and financial profile.

The mortgage loan sanction is repaid in the form of EMIs (equated monthly instalments) that have two components. The amount you repay at the end of closing your loan comprises of the following: 

  1. The Principal Amount: This amount is your original loan ask and what the lender disburses into your account.
  2. The Loan Interest: This amount is the cost of borrowing the principal amount, usually charged per the compound interest format.

However, you may also prepay parts of your loan ahead of time or even foreclose your loan before your repayment tenor ends. If you are an individual borrower with a floating interest loan, you enjoy these privileges at zero additional costs – boosting the savings you make on your mortgage loan.

Also Read: Floating Interest Rate on a Loan Against Property

Listed below are the popular types of mortgage loans that are available to interested borrowers in India.

  1. Home Loan: A Housing Loan is a secured loan through which you borrow a sum to purchase a property from a developer, individual, or an entity. You may even receive a sanction to facilitate the repurchase of an old property. For new constructions, loans are offered for ready for possession properties and even ones that are under construction.
  2. Loan Against Commercial Property: A Loan Against Commercial Property is a secured loan that allows you to mortgage your commercial property for a sizeable sum. The sanction can be used to address a variety of expenses as the amount comes with no end-use limitations. 
  3. Loan Against Residential Property: Similarly, a Loan Against Residential Property allows you to mortgage your residential property for a sizeable loan sanction with no restrictions on its end-use.
  4. Lease Rental Discounting: Lease Rental Discounting is a credit tool sanctioned against income-producing commercial property. 

Also Read: Types of Properties for Mortgage Loan



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