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One label, four very different mortgage loans

A mortgage loan pledges property as collateral — but that single label covers loan against property, home loans, reverse mortgage and commercial property finance. Choosing the wrong one costs you either rate, tenure, or the amount you can raise.

8.00%p.a. onwards Up to 90%of property value 30 yearsmaximum tenure
Find the right one +91-9810454531
An apartment building of the kind pledged as mortgage collateral Government banks lowest rates on secured credit
4 types LAP, home, reverse, commercial
8% – 12% Typical rate range p.a.
Up to 30 yrs Depending on the product
700+ Credit score for best terms

What a mortgage loan is

A mortgage loan from a government bank in India is a type of secured loan where the borrower pledges a property as collateral. These loans are used for a range of purposes — purchasing a new property, consolidating debt, financing large expenses, or raising funds for business.

Because the loan is backed by real security, mortgage products carry materially lower rates than any unsecured borrowing, support far larger amounts, and run over much longer tenures.

Where we come in. Most borrowers arrive asking for “a mortgage loan” when what they need is specifically a LAP, or specifically a reverse mortgage. Getting that choice right at the start is the single highest-value decision on this page.

The four types of mortgage loan

1. Loan Against Property (LAP)

Purpose
Business expansion, debt consolidation, education, medical emergencies or other personal needs
Property Types
Residential, commercial or industrial
Loan Amount
Typically 50% to 70% of current market value
Interest Rate
9% to 12% per annum
Tenure
Up to 15 years; some banks extend to 20 for high-value loans
Collateral
The property being mortgaged

See the full Loan Against Property page →

2. Home Loan

Purpose
Purchasing a new home, constructing a house, or buying an under-construction property
Property Types
Residential only — apartments, individual houses, plots with construction plans
Loan Amount
Up to 80–90% of the property value
Interest Rate
8% to 9.5% per annum
Tenure
Up to 30 years, depending on the borrower’s profile
Collateral
The property being purchased

See the full Home Loan page →

3. Reverse Mortgage

Purpose
For senior citizens aged 60 and above, to receive regular payments against a self-occupied residential property
Property Types
Residential property owned and occupied by the borrower
Loan Amount
Based on market value and the borrower’s age, typically up to 60% of property value
Interest Rate
10% to 12% per annum
Tenure
Usually 15 to 20 years, or the borrower’s lifetime
Payout
Monthly, quarterly or lump-sum

4. Commercial Property Loan

Purpose
To purchase or construct commercial property such as offices, shops or warehouses
Property Types
Commercial real estate — office space, retail space or industrial units
Loan Amount
Up to 60–70% of market value
Interest Rate
9% to 12% per annum
Tenure
Up to 15 years
Collateral
The commercial property being financed

Eligibility criteria in detail

Age

  • Salaried individuals — minimum 21 years, with maximum age at loan maturity usually 60 years.
  • Self-employed individuals — minimum 21 years, with maximum age at maturity usually 65 years.

Income

  • Salaried — a stable monthly income meeting the bank’s minimum threshold.
  • Self-employed — consistent income from business operations, verified through IT returns and bank statements.

Credit score

A score of 700 and above is usually required for favourable terms. A lower score may still be accepted, but it typically translates into a higher rate or a lower LTV.

Property criteria

  • Title — the property must have a clear and marketable title with no existing encumbrances.
  • Age of property — some banks restrict the age of the property being mortgaged, particularly for home loans.
  • Location — the property must fall within the bank’s approved geography. Certain rural or underdeveloped areas may not qualify.

Employment stability

  • Salaried — a continuous employment history, with at least 2 years in the current job.
  • Self-employed — a stable business operating history of at least 3 years.

Documentation requirements

KYC Documents

  • Identity — PAN card, Aadhaar, Passport, Voter ID
  • Address — utility bills, rental agreement, Aadhaar, Passport

Income Proof

  • Salaried — latest 3 to 6 months’ salary slips, Form 16, IT returns
  • Self-employed — IT returns for 2 to 3 years, P&L statement, balance sheet, business registration certificate

Property Documents

  • Title deed — legal proof of ownership
  • Sale agreement, in case of a new purchase
  • Encumbrance certificate
  • Approved building plan, for home and construction loans

Bank Statements

  • Last 6 to 12 months of statements
  • Required for both salaried and self-employed applicants

Benefits and advantages

  • Lower interest rates — because the loan is backed by collateral, rates run well below unsecured borrowing.
  • Large loan amounts — the property value lets you secure far more than any unsecured product would allow.
  • Longer repayment periods — tenures extend up to 30 years on home loans, keeping the EMI manageable.
  • Tax benefits — on home loans, principal qualifies under Section 80C and interest under Section 24(b). On LAP, interest may be deductible where the loan is used for business purposes.
  • Multipurpose use — funds can go towards business expansion, medical costs, education or debt consolidation.
  • No prepayment penalty — on floating rate loans to individual borrowers, prepayment charges are generally waived.
Mortgage FAQ

Questions borrowers ask us

If yours is not here, ask it on the phone — you will get a straight answer, not a sales pitch.

Still need an answer?

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A home loan is one type of mortgage loan — specifically for buying or building a residential property, where the property being bought is the collateral. A mortgage loan is the wider family, which also covers raising funds against property you already own, reverse mortgage and commercial property finance.

A senior citizen aged 60 or above mortgages a self-occupied residential property and receives payments from the bank — monthly, quarterly or as a lump sum — rather than paying EMIs. The amount is based on property value and the borrower’s age, typically up to 60% of value. The borrower continues living in the home.

On floating rate loans to individual borrowers, prepayment penalties are generally waived, so you can close early without extra cost. Fixed rate loans and loans to non-individual borrowers can attract a charge — check the sanction letter.

On a home loan, yes — principal under Section 80C and interest under Section 24(b). On a loan against property, interest may be deductible where the funds are demonstrably used for business purposes. A LAP taken for personal use does not attract the home loan deductions.

It depends on the bank. Every lender maintains an approved geography, and some rural or underdeveloped locations fall outside it. This varies widely between banks, so a property one lender refuses may be perfectly acceptable to another — which is exactly the kind of thing we check before an application goes in.

Related

You may also be looking at

Loan Against Property Raise funds against property you own Home Loan For buying or building a home Project Finance Loan For a new unit or major expansion

Pledging property is a twenty-year decision

Get the product right at the start. Tell us the property and the purpose, and our ex-bankers will tell you which of the four fits — and what it will realistically cost you.

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