Mortgage loan interest rates and charges

Mortgage loans are secured loans that an eligible applicant can avail by keeping an owned property as collateral to the financial institution. Lenders generally offer attractive mortgage loan interest rates which makes loan repayments affordable and convenient.

A borrower can avail of Rs. 5 Crore** as a mortgage loan with the repayment tenor extending up to 18 years.

Maximum mortgage loan amount a borrower is eligible to avail depends on the loan to value (LTV) ratio offered by the lender among other factors. With the best lenders, the LTV can range between 70% to 75% of the property’s market value.

Avail mortgage loan interest rates, with money in bank in 3 days*. There are no hidden charges involved.

Here is a list of the rates and charges of mortgage loan.

Mortgage Loan Interest Rate (Floating)

Benchmark Rate (BR)

Employment Type

Effective ROI (p.a.)

Salaried floating reference rate

Salaried

8.40% to 15.00%

Self-employed floating reference rate

Self-employed

7.75% to 18.00%


Fees and charges applicable on property loan

Types of Fees on Property Loan

Charges Applicable

Mortgage Loan processing fees

7%

Loan against property statement charges

Rs. 50

Mortgage loan interest and principal statement charges

NIL

Mortgage EMI bounce charges

Up to Rs. 3,000/-

Penal interest

Up to 2% per month + applicable taxes

Mortgage origination fee*

Up to Rs.10,000 + GST as applicable


Mortgage loan foreclosure charges

Borrower type: Interest type

Time (Months)

Foreclosure charges

Individual: Floating rate

>1

Nil

Non-individual: Floating rate

>1

4% + applicable taxes

All borrowers: Fixed rate

>1

4% + applicable taxes


Mortgage loan pre-payment charges

Borrower type: Interest type

Time (Months)

Part-prepayment charges

Individual: Floating rate

>1

Nil

Non-individual: Floating rate

>1

2% + applicable taxes

All borrowers: Fixed rate

>1

2% + applicable taxes


Bajaj Finserv also brings you the fastest loans against property with disbursal of loan amount within 3* days.

Factors affecting mortgage loan interest rate

Mortgage loan interest rate are typically low owing to their secured nature. As a result, borrowers enjoy comfortable repayment and low cost of borrowing. Several factors influence mortgage loan interest rates, read on to know more about these.

1. Property type and location

Although any immovable asset is eligible for a loan against property, its type determines the mortgage loan rates. For instance, lenders offer different interest rates for residential and commercial properties. Besides, the resale value of a property, its location, also influences this interest rate.

Usually, a property located in the heart of a city with modern amenities has higher resale value. Hence, on mortgaging that property, lenders can ascertain the recovery of the loan amount in case you default. Consequently, interest rates will be lower. Similarly, the property’s age also affects mortgage loan interest rates. The newer the property, lower the interest rates.

2. Credit score

Lenders also consider a borrower’s credit profile before deciding mortgage interest rates. Below are some of the aspects that influence this rate.

  • Credit score
  • Income
  • Employment type
  • Age
  • Credit utilisation ratio
  • FOIR
  • Existing debts

Preferably, a credit score of 750 and above is deemed ideal to secure competitive interest rates from lenders. Similarly, the interest rate for a 55-year old salaried applicant would be more as he/she would retire from the job soon.

Moreover, lenders also check how the applicant handled previous debts, repaid on time or not, etc. Since all these factors directly influence credit score, it is important to adopt healthy financial habits to upkeep the score. It helps in availing the best mortgage loan interest rates available in market.

3. Size of loan

A mortgage loan is a high-value credit, and it is possible to avail up to 80% LTV against a property. However, high-value loans as risky on a lender’s part, as monthly instalments are higher in that case. Therefore, to compensate for the risk of borrowing, they may charge a high mortgage loan interest rate when loan amount is substantial. Hence, it is necessary to assess the exact credit requirement before applying to ensure competitive interest rates.

Note: Avoid pledging high-value assets to avail a small mortgage loan.

4. Loan tenor

The tenor of loan also plays a crucial role in deciding mortgage loan interest rates. Usually, a mortgage loan accompanies a long tenor, and you can choose a term as per your repayment capacity. Nonetheless, on selecting a shorter tenor for high loan value, lenders may consider you a risky borrower. In such cases, the interest rate is usually higher.

Nonetheless, opting for a longer tenor can increase the total interest outgo in the long run. In this case, use an online loan against property EMI calculator to check the EMI outgo after entering tenor and interest rate proposed to you.

Besides these reasons, mortgage loan interest rates can also be influenced by market conditions if the rate type opted for is floating in nature. 

Types of mortgage loan

There are different types of mortgage loans depending upon the nature of mortgage. Know them before you apply for one.

  • Simple mortgage: It involves personal mortgaging of an immovable property, which bestows upon the lender a right to sell such property for loan recovery in case a borrower fails to repay the amount
  • English mortgage: It involves the creation of personal liability for the borrower, whereby mortgage involves property transfer to the lender and recovery, thereby after successful repayment
  • Usufructuary mortgage: The arrangement involves the transfer of property possession, allowing a lender to receive rent or any other payment for such property until loan repayment in full
  • Mortgage via a deposit of title deed: It comprises the process of a borrower depositing the mortgaged property’s title deed with the lender until repayment is complete
  • Conditional sale mortgage: It refers to an arrangement wherein the property is sold to the lender with such sale becoming effective only in the case of repayment defaults. However, successful repayment nullifies the sale arrangement.

If identifying a particular mortgage type within these classifications is not possible, it is termed as an anomalous mortgage.

Lenders provide mortgage loans customised to suit diverse funding needs of borrowers. Features, benefits, and mortgage loan interest rates on such advances vary with the credit option and lender selected. They include:

  • Loan against property – The high-value loan comes with no restriction to end-use, allowing borrowers to utilise it for diverse, big-ticket funding needs. Loan utilisation in this case includes fulfilling funding needs for the likes of business expansion, asset acquisition, medical emergencies, wedding expenses, etc
  • Mortgage loans with flexi hybrid feature – Bajaj Housing Finance Limited provides its Mortgage Loan with the Flexi Hybrid feature, which allows borrowers to make multiple withdrawals from a pre-sanctioned loan amount. Also, interest accrual only on the withdrawn amount makes EMIs affordable
  • Top-ups on mortgage loans – Borrowers can also avail top-up advance when availing a balance transfer facility for an existing mortgage loan. It comes with a high loan quantum and at low mortgage loan interest rates.

Frequently asked questions

How to lower mortgage loan interest rates?

Follow these simple steps to reduce your mortgage loan rates:

  • Pay down the principal amount
    When you take a loan against property, try to make extra payments each month which will help you to lower mortgage loan interest rates
  • Good credit score
    If your credit score is good enough then mortgage loan is the best option for you. A good credit score proves that you’re likely to repay the loan, which means lower mortgage loan rates for you
  • Shorten your loan
    Try to make your mortgage loan tenure 10 or 15 years. The loan with shorter-term will have low mortgage loan rates
  • Refinance
    Those who are looking for a lower mortgage loan rate of interest should consider refinancing their existing mortgages. Use a Mortgage Loan EMI Calculator to decide whether refinancing is really worthwhile
How to calculate mortgage loan interest rate?

To calculate mortgage loan interest rate, use the following formula:

EMI= [P x R x (1+R)/\N]/ [(1+R)/\N-1]

In this formula,
P- Principal
N- No. of monthly installments
R- Rate of interest
You can also calculate mortgage loan interest rate by Mortgage Loan Calculator.

What is the difference between a personal loan and a mortgage loan?

Personal Loan and Mortgage Loan are two different types of advances Bajaj Finserv provides with different purposes, features and more. Difference between Personal Loan vs Mortgage Loan include:

  • Personal Loans are unsecured credit offered to individuals with high creditworthiness. Mortgage Loans are secured advances provided against property mortgage
  • You can avail mortgage credit of high value at a lower rate of interest as against a personal credit with lower value and high interest rate
  • Mortgage Loans come with longer repayment tenures than personal advances.

Between a personal loan and loan against property, the latter becomes a more convenient and affordable financing option if you have a property to be mortgaged. Apply for it with essential documents to enjoy quick approval.

When will my mortgage loan interest rate change?

The changes in mortgage loan interest rates will depend on internal benchmark of financial institutions.

How is the Bajaj Finserv Mortgage Loan the best?

Bajaj Finserv Loan Against Property is one of the best mortgage loans to avail as it comes with unique borrower-friendly features such as:

  • High-value loan of up to Rs. 5 Crore* to meet big-ticket expenses
  • The flexible tenure of up to 18 years for convenience in repayment
  • Fastest property loan with approval within 72 hours* and disbursal within 3 days* of approval
  • High-value top up Loans with balance transfer facility at lower rates of interest
  • Flexi loan facility for anytime-withdrawal from pre-sanctioned credit amount and interest repayment only on the amount withdrawn

To avail these attractive features of Bajaj Finserv Mortgage Loan, apply with the online form.

What is the difference between home loan and mortgage loan?

When it comes to home loan vs mortgage loan, the most vital differences to consider include:

  • While the former is a type of mortgage credit itself, the latter is an advance lenders provide against collateral. Both home loan and loan against property are loans availed against the property mortgaged
  • A mortgage credit does not have a fixed purpose of use; a home advance is provided to acquire a residential house
  • For the former, lenders pay directly to the seller, while the amount of a mortgage credit like advance against property may be transferred directly to your account

With this difference sorted, you can apply for a loan against property with Bajaj Finserv as it comes with no end-use restriction.

Can an existing borrower avail the new mortgage loan interest rate?

Yes, this is possible if you have opted for floating interest rate. This depends on internal benchmark of financial institutions also. So, changes in mortgage loan interest rate will directly impact your interest rates too.

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