What is the Interest Rate on Mortgage Loans?

A mortgage loan or Loan Against Property offers access to substantial funds by pledging residential or commercial property as a collateral. One of the key elements to consider before applying is the mortgage loan interest rate, which directly impacts your overall cost of borrowing. Understanding the current rates, how they are calculated, and what influences them can help you choose the right mortgage loan. 

Mortgage Loan Interest Rates and Charges 

As compared to an unsecured loan, such as a personal loan, a mortgage loan comes with a competitive interest rate. Bajaj Housing Finance offers Loans Against Property at attractive interest rates starting from 9.40%* p.a. for self-employed applicants. To learn more about our interest rates, ​​click here. ​​Click here to learn about our fees and charges.  

How to Calculate Mortgage Loan EMIs?

To estimate your monthly instalments, you can use the following formula: 

EMI = [P x R x (1+R)^N] / [(1+R)^N – 1] 

Where: 

• P = Principal loan amount 
• R = Monthly interest rate (annual rate divided by 12) 
• N = Loan tenure in months 

Alternatively, you can use our ​​Loan Against Property EMI Calculator for quick calculations. 

Types of Mortgage Loans in India

Understanding the different types of mortgage loans can help you choose the most suitable option: 

• Loan Against Residential Property: Funds secured against owned residential property. 
• Loan Against Commercial Property: Funds secured against commercial real estate. 
• Lease Rental Discounting (LRD): Loans offered based on rental income from leased properties. 
• Loan Against Property Balance Transfer: Transfer your mortgage loan balance to another lender for better terms  

Factors Affecting Loan Against Property Interest Rates 

Several factors influence the interest rate on a Loan Against Property, such as: 

• Credit Score: A higher credit score reflects a good repayment history and can help secure a more favourable interest rate. 
• Employment Type: The nature of your employment may affect your interest rate. 
• FOIR (Fixed Obligation to Income Ratio): This represents the portion of your income used to service existing obligations. A lower FOIR may help you qualify for a better rate. 

Tips to Avail Mortgage Loan at Low Interest Rates

To secure a mortgage loan with a feasible interest rate: 

• Aim for a score above 750.  
• If you have an existing loan, transferring it to a lender with better terms can be beneficial.  
• Reducing your ongoing financial obligations can improve your FOIR and help you qualify for better loan terms. 

Understanding the basics of mortgage loan interest rates in India is essential for making informed borrowing decisions. Assess your financial profile, compare options, and choose a loan that aligns with your objectives.​