A mortgage loan is a secured loan where your property acts as collateral, providing you with the financial support you need. Bajaj Finance offers various types of mortgage loans to cater to diverse requirements such as home renovations, business expansion, and more. These loan options include simple mortgage, usufructuary mortgage, English mortgage, mortgage by conditional sale, mortgage by title deed deposit, and anomalous mortgage. Each type has its unique features and benefits, allowing you to choose the one that best aligns with your financial goals. Understanding these mortgage options is crucial for making an informed decision.
What are the types of mortgage loan?
A mortgage loan is a secured loan where a borrower pledges their property as collateral to secure funds. It has become a popular financing option due to its sizable loan amounts, relatively low interest rates, and flexible repayment tenures. In India, there are several types of mortgage loans, each catering to different needs and circumstances. These include the simple mortgage, usufructuary mortgage, English mortgage, mortgage by conditional sale, mortgage by title deed deposit, and anomalous mortgages. Each type offers distinct features and terms, and understanding these types of mortgage loans can help borrowers choose the best option based on their requirements.
Types of mortgage loan
Mortgages are available in various formats, with 30-year and 15-year fixed-rate options being the most common. Loan terms can range from as short as five years to as long as 40 years or more. While extending the repayment period can lower monthly payments, it also significantly increases the total interest paid over the loan's duration.
Types of mortgages
- Simple mortgage
In a simple mortgage, the borrower pledges their property as security while retaining ownership. If the borrower defaults, the lender has the legal right to sell the property to recover dues, and any surplus from the sale goes to the borrower. - Mortgage by conditional sale
Here, the property's ownership is conditionally transferred to the lender. If the borrower repays the loan on time, the ownership remains theirs. However, in case of default, the transfer becomes effective. - English mortgage
The borrower transfers complete ownership of the property to the lender, with a promise to repay the loan on a specific date. Once the loan is fully repaid, ownership reverts to the borrower. - Fixed-rate mortgage
This mortgage features a constant interest rate throughout the loan tenure, providing stable and predictable monthly repayments, regardless of market fluctuations. - Usufructuary mortgage
In this arrangement, the borrower hands over possession of the property to the lender. The lender can use the property or earn rental income from it until the loan is repaid. - Anomalous mortgage
This is a non-standard mortgage that combines elements of different types or includes unique terms not covered by traditional mortgage categories. - Reverse mortgage
Designed for senior citizens, this allows homeowners to receive regular payments from a lender against the value of their home. Ownership remains with the borrower, and repayment is typically made by selling the property after the borrower's death or when they vacate the home.
Mortgage type |
Type of property |
Category |
Simple Mortgage |
Residential or Commercial Property |
Secured Loan |
Mortgage by Conditional Sale |
Residential or Commercial Property |
Secured Loan |
English Mortgage |
Residential or Commercial Property |
Secured Loan |
Fixed-Rate Mortgage |
Residential Property |
Home Loan |
Usufructuary Mortgage |
Residential or Commercial Property |
Secured Loan |
Anomalous Mortgage |
Residential or Commercial Property |
Secured Loan |
Reverse Mortgage |
Residential Property |
Loan Against Property |
Pro tip: Did you know you can unlock the hidden potential of your property by opting for a loan against property? Whether for personal or business needs, it is a smart way to leverage your real estate for high-value financing. By pledging the value of your own property, you can access large funds —all with flexible repayment options and competitive interest rates. Explore our offers on loan against property today!
How Does a Mortgage Work?
A mortgage is a long-term loan used to buy a home, with the property serving as collateral. The borrower repays the loan in installments, typically monthly, which include principal (the loan amount) and interest. Mortgage terms usually last 15 or 30 years, with interest rates being either fixed or adjustable. If the borrower fails to repay the loan, the lender can foreclose on the property. Key factors like credit score, income, and debt-to-income ratio impact the loan approval process. Over time, as the mortgage is paid down, the borrower builds equity in the home.
You don’t have to sell your home to access its value. With Bajaj Finserv Loan Against Property, you can continue enjoying ownership while utilising funds for needs like education, business expansion, or medical expenses. This secured loan allows you to access funds while retaining ownership, making it an excellent option for business expansion, education, medical expenses, or debt consolidation. With lower interest rates and flexible repayment terms, loan against property provides a smart way to unlock your property's financial potential. Check your loan against property eligibility in seconds.
Also Read: Types of loan against property
Mortgage Loan Complete Process
Pre-Qualification
Estimate loan eligibility based on basic financial details.
Pre-Approval
Lender verifies income, credit, and offers a conditional loan.
Property Search
Find a home within the approved loan range.
Loan Application
Submit financial documents and apply for a mortgage.
Appraisal & Underwriting
Lender assesses the home’s value and verifies information.
Loan Approval
Final approval based on all checks and documentation.
Closing
Sign paperwork, pay closing costs, and transfer ownership.
Monthly Payments
Start making mortgage payments to repay the loan over the agreed term.
Facing unexpected financial needs? Your property can be more than just a place to live or work—it can also serve as a valuable financial resource. By opting for a loan against property, you can unlock the equity tied up in your real estate without selling it. Whether you are dealing with medical emergencies, funding your child's education, expanding your business, or managing debt consolidation, a loan against property offers a practical and cost-effective solution. Check your loan against property eligibility in seconds.
How to compare mortgage?
Comparing mortgages involves evaluating several key factors to find the best option for your financial needs. Start by comparing interest rates—fixed versus variable—to understand potential cost fluctuations. Assess the loan tenure, as longer terms reduce monthly payments but increase total interest. Consider fees, including processing charges, prepayment penalties, and closing costs. Check the lender’s credibility and customer service quality. Use online calculators to compare monthly payments and overall costs. Additionally, review eligibility criteria, required documents, and flexibility in repayment options.
Interest rates
Compare the interest rates offered by different lenders. A lower rate can significantly reduce your overall loan cost.
Loan tenure
Assess the repayment period offered. A longer tenure can reduce your EMIs but may result in higher total interest payments.
Processing fees and other charges
Review the processing fees, administrative charges, and prepayment or foreclosure fees. These can vary significantly between lenders.
Loan-to-Value (LTV) ratio
Check the LTV ratio, which determines the loan amount relative to the property value. A higher LTV means you can borrow more.
Flexibility in repayment
Look for loans with flexible repayment options, such as part-prepayment or EMI moratoriums, to ease financial stress.
Eligibility criteria
Ensure you meet the eligibility criteria for the mortgage, which may vary based on your income, credit score, and property type.
Customer service and support
Choose a lender with good customer service to ensure a smooth application and repayment experience.
Mortgage loans by Bajaj Finance
Bajaj Finserv offers mortgage loans at competitive mortgage loan interest rates to finance your big-ticket purchases. These loans combine the best features of the various mortgage types listed above and include:
- Home loan
- Loan against commercial property
- Loan against residential property
- Land purchase loan
- Loan to purchase another commercial property
- Lease rental discounting
Check our mortgage loan eligibility requirements carefully before applying. Also, know the Mortgage Loan interest rates to plan your finances accordingly. Avail them by following simple Mortgage Loan process.
Unlocking financial potential with loan against property
Now that you well-versed with property act, let us explore your funding options to meet your financial needs. Whether you own a residential or a commercial property, Bajaj Finserv Loan Against Property allows you to leverage your real estate for various financial needs, including business expansion, wedding, education financing, or medical emergencies. Enjoy competitive interest rates, flexible repayment plans, quick loan approval, and easy eligibility criteria with Bajaj Finance
Benefits of Bajaj Finserv Loan Against Property
- Competitive interest rates: Bajaj Finance offers attractive rates, making borrowing affordable.
- Fast approval: Experience swift loan approval and disbursal to access funds during urgent situations.
- Easy eligibility: The qualification process is simple, making loan access hassle-free.
Did you know you may be eligible for our loan against property offers with low-interest rates? Check your offer in just 2 clicks!
Related mortgage terms
Mortgage FAQs
The two main types of mortgage loans are:
- Simple mortgage: The lender has the right to sell the mortgaged property if there is a payment default.
- Usufructuary mortgage: The possession is transferred to the lender. The lender can receive rent or profit from it without putting a personal liability on the borrower.
Simple mortgage: In this type of mortgage, the borrower repays the loan amount in EMIs over a mutually decide tenure.
A bridge loan is a short-term loan used to "bridge" the gap between the purchase of a new property and the sale of an existing one, often with higher interest rates.
Yes, there are specialized mortgage loans for first-time homebuyers. These typically offer lower interest rates, reduced down payments, and more flexible qualification criteria to make homeownership more accessible.
A negative amortisation mortgage occurs when monthly payments are lower than the interest due, causing the loan balance to increase over time. This can result in owing more than the original loan amount.
A permanent mortgage in construction financing refers to a long-term loan that replaces a construction loan once the project is completed, providing permanent financing for the newly built property.
Prepayment penalties vary by lender and loan type. Some mortgage loans allow prepayment without penalties, while others may charge fees. Check your loan agreement for details.
Documents include identity proof, address proof, income proof, property documents, and bank statements. Requirements may vary based on the loan type, lender, and borrower’s financial profile.
Yes, many lenders offer mortgage loans specifically for purchasing land or plots. Loan terms, eligibility, and interest rates depend on the lender’s policies and property type.
The six common types of mortgages include fixed-rate, adjustable-rate, interest-only, reverse, government-backed (FHA/VA), and jumbo loans, catering to diverse borrower needs and preferences.
The 30-year fixed-rate mortgage is the most commonly used, offering predictable payments and affordability due to its extended repayment period.
There can be several mortgage types, including variations like hybrid loans, balloon mortgages, and others tailored to specific financial situations or market conditions.
You can have multiple mortgages on your home, such as a primary mortgage and secondary loans, but it depends on lender policies and your equity.
