Mortgage loans are secured in nature. A borrower must mortgage a property with the lender to avail this type of a loan. The collateral is held by the lender until full repayment of the loan is done. The loan is repaid through equated monthly instalments or EMIs.
The repayment schedule of a mortgage loan is calculated on the basis of amortisation. It refers to the process of calculating the amount of EMI. The value mainly depends upon the mortgage loan interest rates and the principal loan amount.
At the initial stages, the interest component will constitute a larger part of your EMIs as compared to the principal amount. As you continue through the repayment tenor, the principal component of your EMI will increase while the interest value will decrease. However, the total EMI value will remain constant throughout the tenor.
Some other features of mortgage loans include:
Also Read: How to use Loan Against Property?
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