Mortgage Loan interest rates 2022

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 starting at 8.60%* p.a. (for self-employed) and 9.10%* p.a. (for salaried professionals) 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)

Fees and charges applicable on property loan

Mortgage loan foreclosure charges

Mortgage loan pre-payment charges

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

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 interest 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. 

There are different types of mortgage loans, depending upon the nature of the mortgage and the mortgage interest rates vary from one loan type to another. 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.