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Top 6 Reasons Why You Should Opt for Mortgage Loans in India


Needless to say, life can be unpredictable at times. During a time of crisis, having a property against which you can obtain a loan can prove to be very helpful. You can leverage your immovable assets, like a shop or house, to take out a mortgage loan. You can further use it for your immediate financial requirements.

Not clear about the concept of a loan against property? So, before we proceed further, let us understand mortgage loans.

What is a mortgage loan?

A mortgage loan is a kind of financial assistance for the loan taken against a property that you legally own. This property or fixed asset can either be your home, your shop, or any of your land. It should be an immovable asset. These loans are offered by either banking or non-banking finance companies. The loan is offered to you as a principal loan by the lender, who charges you interest for that particular amount payable in monthly installments. 

One of the most significant advantages of applying for a mortgage loan is its ease of repayment. Monthly installments can be used to repay the loan. The rate of interest is also usually on the lower end.

However, your property or an immovable asset stays in the possession of the lender until the loan amount is paid back in full along with the interest. The lender of the property has the legal right to claim the property if the borrower of the loan doesn’t pay it back. In such a case, the lender can seize it and sell it off to cover their damages. 

Top 6 Reasons to Opt for a Mortgage Loan in India

A person can take out a mortgage loan for several reasons. Here are the top 6 reasons why people should opt for mortgage loans in India.

1) Mortgage Loans Come with Lower Interest Rates

A loan against property is taken while keeping a fixed asset, like a house or commercial property, as collateral. The interest rate is usually lower when compared to other loans, such as personal loans. Mortgage loan interest rates typically range between 12% and 15%.

2) Lower to No Prepayment Charges

Lenders such as banking institutions don’t levy any kind of prepayment charges for loans against property. This is one major reason people opt for a mortgage loan.

3) Mortgage Loan Is Easy To Get & Has Longer Tenure 

As a mortgage loan is a secured loan, you can easily get it through banks. The biggest advantage of having a property loan is that it is available for a longer tenure. The tenure can go up to 15 years. That’s more than a decade, and it is a good enough time to repay it properly. On the other hand, other types of loans, such as personal loans, only go up to 7 years. This is far less than a loan against property. 

4) Mortgage Loans Come with Lower EMIs

Another practical reason to opt for a mortgage loan is the lower EMIs. The longer you have to repay your loan against property, the lower your EMI will be. People tend to choose mortgage loans because they generally cannot afford to pay higher EMIs. 

5) Mortgage Loans Improve Your Overall Credit Rating 

A mortgage loan, like any other loan, allows people to build a good credit score. A good credit score improves and lowers your future cost of borrowing. However, the credit rating could also be negatively affected if the loan is not paid back in full. In such a case, your overall ability to obtain any type of loan will be greatly reduced.

6) You Get to Enjoy Tax Benefits

With a loan against property, you get to enjoy tax benefits as well. However, in order to claim deductions, you must be able to demonstrate that the mortgage loan was used for business expenses or to purchase residential property.

Different Types of Interest Rates on a Mortgage Loan

While paying the mortgage, you can opt for two types of interest rates. Fixed and floating interest rates. First, let us understand what these interest rates are.

Fixed interest rate

As the name suggests, the fixed interest rate remains constant for the whole loan tenure. The changes in the market do not affect the interest rate. This is why many people prefer fixed interest rates. It helps the borrower keep away from any kind of financial risk while giving them the freedom to pay back the loan amount in monthly installments. 

Floating interest rate

The floating interest rate keeps changing as per the repo rate and market fluctuations. As the name suggests, the floating rate changes periodically. It is directly impacted by the fluctuations happening in the markets. However, many people prefer to opt for this rate of interest as many times the variable declines owing to market conditions. In such a case, the borrowers also end up paying a lesser interest amount. 

You can choose the type of interest rate according to your preference.


If leveraged the right way, a mortgage loan can prove quite beneficial for anyone who needs funds. There can be any number of reasons for people to take out a mortgage loan, from funding a wedding to funding a business. And opting for a loan against property can help you resolve all these issues.

To know more about other such topics, visit the Primal Finance website.