What Is a Mortgage Loan?
A Mortgage Loan is a secured loan where a borrower pledges a residential, commercial, or industrial property as collateral to obtain funds from a bank or financial institution. In India, mortgage loans are commonly known as Loan Against Property (LAP).
In 2026, mortgage loans are widely used for business expansion, large personal expenses, education funding, and debt consolidation due to their lower interest rates and higher loan amounts compared to unsecured loans.
Key Features of Mortgage Loans in 2026
- Property-backed secured loan
- Lower interest rates than personal loans
- High loan amount eligibility
- Long repayment tenure up to 20 years
- Funds can be used for multiple purposes
- Available for salaried, self-employed, and business owners
Mortgage Loan Interest Rates in 2026
Mortgage loan interest rates depend on property value, borrower profile, credit score, and income stability.
| Lender Type |
Interest Rate Range (p.a.) |
Loan-to-Value (LTV) |
Tenure |
| Public Sector Banks |
8.75% – 10.50% |
Up to 65% |
Up to 20 years |
| Private Banks |
9.00% – 12.00% |
Up to 70% |
Up to 20 years |
| NBFCs |
10.00% – 14.00% |
Up to 75% |
Up to 15 years |
Mortgage Loan Eligibility Criteria
- Age between 25 and 65 years
- Stable income or profitable business
- Credit score of 700 or above
- Property with clear legal title
- Indian resident or eligible NRI
Documents Required for Mortgage Loan
- Identity and address proof
- Income proof (salary slips or ITR)
- Bank statements (last 6 months)
- Property ownership documents
- Property valuation and legal clearance papers
Mortgage Loan EMI Example
If you take a mortgage loan of ₹1,00,00,000 for 15 years at an interest rate of 9.5%:
- Monthly EMI: ₹10,450 (approx.)
- Total interest payable: ₹88,10,000 (approx.)
- Total repayment amount: ₹1,88,10,000 (approx.)
Advantages and Disadvantages of Mortgage Loans
Advantages
- Lower interest rates compared to unsecured loans
- Higher loan amounts
- Longer repayment tenure
- Flexible end-use of funds
Disadvantages
- Property is pledged as collateral
- Longer processing time
- Risk of property loss in case of default
How to Choose the Best Mortgage Loan in 2026
- Compare interest rates across lenders
- Check loan-to-value ratio offered
- Evaluate processing fees and hidden costs
- Ensure clear property documentation
- Select a tenure that balances EMI and interest cost
Frequently Asked Questions (FAQs)
Is a mortgage loan the same as a home loan?
No. A home loan is used to purchase or build a house, while a mortgage loan is taken against an already owned property.
Can I use a mortgage loan for business purposes?
Yes, mortgage loans can be used for business expansion, education, or personal needs.
How much loan can I get against my property?
Most lenders offer 60%–75% of the property’s market value.
Is prepayment allowed on mortgage loans?
Yes, most lenders allow partial or full prepayment, subject to terms.
Does credit score matter for mortgage loans?
Yes, a good credit score improves approval chances and lowers interest rates.
Author: All Finance Store Research Team
Expertise: Secured Loans, Property Finance & Banking
Last Updated: January 2026
Disclaimer: This content is for informational purposes only. Mortgage loan terms, interest rates, and eligibility criteria vary by lender and borrower profile. Always verify details with official lender sources before applying.