Loan Against Property Interest Rates
Most banks and housing finance companies (HFCs) offer loan against property interest rates starting from 9% p.a. The interest rates depend on various factors including the lender’s policy, borrower’s credit profile, property’s evaluation, loan tenure, and so on. Borrowers can secure loan amounts of up to 90% of the property value with a maximum repayment tenure of 25 years.
Loan Against Property Interest Rates for all Banks
Below are the loan against property interest rates of top banks and other lenders in India:
| Lender | Interest Rate (p.a.) |
| HDFC Bank | 9.50% - 11% |
| IDFC First Bank | 9.25% onwards |
| HSBC Bank | 9.45% onwards |
| Kotak Mahindra Bank | 9.50% onwards |
| PNB Housing | 9.24% - 12.45% |
| State Bank of India | 10.45% - 12% |
| Federal Bank | 12.60% - 13% |
| Home First | 12.80% - 18.50% |
| Bank of India | 10.10% onwards |
| Bank of Baroda | 9.95% - 15.75% |
| IDBI Bank | 9.60% - 11.55% |
| Central Bank of India | 9.75% - 13% |
| Bank of Maharashtra | 10.95% - 11.95% |
| Bajaj Finserv | 9% - 12% |
| ICICI Bank | 10.85% - 12.50% |
| Canara Bank | 10.30% - 12.80% |
| TATA Capital | 9% onwards |
| UCO Bank | 10.25% - 12% |
| Axis Bank | 10.50% - 10.95% |
| Bajaj Housing Finance | 9.40% - 18% |
| Indian Overseas Bank | 10.40% - 11.40% |
| IndusInd Bank | 9% - 13% |
| Standard Chartered Bank | 9.50% onwards |
| Union Bank of India | 10.45% - 12.35% |
Loan Against Property EMI Calculator
Calculating your loan against property EMI is easy and instant with the Loan Against Property EMI Calculator. This online tool requires you to provide some basic loan details such as principal loan amount, property loan interest rate, and repayment tenure.
Below is the example of an EMI calculation using the mortgage loan EMI calculator for Rs. 1 Lakh mortgage loan at loan against property lowest interest rate of 9% p.a. for 15 years tenure:
| Year | Opening Balance | EMI*12 (in Rs.) | Interest Paid During the Year (in Rs.) | Principal During the Year (in Rs.) | Closing Balance (in Rs.) |
| 1 | 1,00,000 | 12,171 | 8,866 | 3,305 | 96,695 |
| 2 | 96,695 | 12,171 | 8,556 | 3,615 | 93,079 |
| 3 | 93,079 | 12,171 | 8,217 | 3,955 | 89,125 |
| 4 | 89,125 | 12,171 | 7,846 | 4,326 | 84,799 |
| 5 | 84,799 | 12,171 | 7,440 | 4,731 | 80,068 |
| 6 | 80,068 | 12,171 | 6,996 | 5,175 | 74,893 |
| 7 | 74,893 | 12,171 | 6,511 | 5,661 | 69,232 |
| 8 | 69,232 | 12,171 | 5,980 | 6,192 | 63,041 |
| 9 | 63,041 | 12,171 | 5,399 | 6,772 | 56,268 |
| 10 | 56,268 | 12,171 | 4,764 | 7,408 | 48,861 |
| 11 | 48,861 | 12,171 | 4,069 | 8,103 | 40,758 |
| 12 | 40,758 | 12,171 | 3,309 | 8,863 | 31,895 |
| 13 | 31,895 | 12,171 | 2,477 | 9,694 | 22,201 |
| 14 | 22,201 | 12,171 | 1,568 | 10,603 | 11,598 |
| 15 | 11,598 | 12,171 | 573 | 11,598 | 0 |
Factors Affecting Loan Against Property Interest Rates
Here are some key factors that affect the loan against property interest rates:
- Loan amount: Generally, lenders have different loan amount slabs and the interest rate varies for each slab. The lower the loan amount, the lower will be the interest rate.
- Repayment tenure: Usually, short-tenure loans have lower interest rates than loans with extended tenures.
- Borrower’s occupation: The employment type of the borrower and their employer’s profile are considered while determining the loan against property interest rates. Also, salaried employees usually benefit from lower interest rates than self-employed borrowers. The reason is the stability and certainty of the income.
- Borrower’s income: Lenders usually offer lower interest rates to applicants with higher and stable monthly income.
- Borrower’s gender: Some lenders offer a concession to women loan applicants under special schemes. Hence, applying with a female family member as a co-applicant can help in availing a lower interest rate.
- Borrower’s credit rating: A high credit score shows responsible credit behaviour and financial discipline and therefore, lenders usually offer lower mortgage loan interest rates to applicants with higher credit scores. Getting a low interest rate on a loan against property without CIBIL is impossible.
- Type of the property: Loans against residential properties generally have a lower interest rate as compared to loans against commercial properties. Also, some lenders offer lower rates for self-occupied residential properties than commercial properties or properties that aren’t self-occupied.
- Borrower’s eligibility: If you meet loan against property eligibility criteria set by the lender, your chances of getting reduced interest rate on property loans will be higher.
LTV ratio: Loan-to-value (LTV) ratio is the proportion of the property’s value that you can avail as a loan amount. The maximum loan amount offered by lenders is up to 90% of the property’s value. However, if you want a lower interest rate, borrowing less can be helpful.
5 Tips to Reduce Your Loan Against Property Interest Rates
Below are the 5 important tips to reduce your mortgage loan interest rates:
- Look for the interest rates offered by different lenders and compare them.
- Choose a shorter repayment tenure as it has a direct impact on the interest rate offered by the lender.
- If you have a poor credit score, build a high score (preferably 750 or above) before applying for the loan or apply with a highly eligible co-applicant.
- Opt for a loan amount that fits your affordability.
- Keep track of interest rate concessions during festive seasons.
FAQs
The current interest rate for a loan against property ranges from 9%, varying from one lender to another.
Applicants with high CIBIL scores, handsome monthly salaries and good property locations have higher chances of getting the lowest interest rates on loans against property.
The CIBIL score has a significant bearing on deciding the rate of interest as it signifies the borrower’s creditworthiness. Usually, banks stipulate a minimum CIBIL score of 650 or above for mortgage loans. The higher your CIBIL score, the lower the rate of interest.
The interest rates for home loans and mortgage loans vary depending on the lender, borrower's eligibility, and other factors. Home loan interest rates in India are typically between 8.5% and 9.5% p.a., whereas loan against property interest rates usually start at 9% p.a.
Both salaried and self-employed individuals can apply for a loan against property. The applicant should have unencumbered residential or commercial property in their name, a complete list of loan against property documents required, a stable income and an excellent credit score.
Usually, floating interest rate-based mortgage loans don’t involve any prepayment charges. However, some banks levy a prepayment penalty or foreclosure charges for fixed interest rate-based loans against property.
Yes, you can transfer your existing loan against property to a new lending institution for a lower interest rate. This facility is called a loan against property balance transfer.
Reshma Rawat is a passionate writer, with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra, and writes blogs & webpages on financial products (loans, credit cards, insurance, financial policies by government, mutual funds, etc.
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