A Complete Guide on How To Avail Mortgage Loans in India


Mortgages are a guarantee that you offer against your loan. The lender will hold your mortgage until the debt is repaid in full. Mortgages are often put up against property but can be for other assets, like cars or a plot of land.

How do Mortgage Loans work?

Mortgages are a way for real estate purchasers to fund their purchase of a property. Existing property owners can also avail them for personal reasons by using their property as collateral.

The loan obtained through a mortgage can be for a specific purpose, like establishing a business or buying a property, or general purposes, like any personal expense. The lender will grant a loan based on the value of the mortgage and the borrower’s repayment ability.

The benefit of mortgage loans is that they can have a longer tenure since the financer has a guarantee against loan repayment in the form of a mortgage. Upon non-repayment of the loan or in case of repeated default, the lender can sell the mortgaged asset to recover the pending loan amount.

Types of Mortgage Loans

Most lenders offer mortgage loans since it’s the most attractive option for borrowers and a secure way of granting a loan for financiers. Here are some of the common Mortgage loans in India:

Commercial Purchase

Businessmen and entrepreneurs commonly avail of this loan to buy or rent office space or expand their current place of business. They can use this loan to buy a shop, an office area, or a workmen’s property.

The interest rates on this loan type are usually competitive. The fund from this loan can be used for business purchases only.

Loan Against Property

It is the most common type of mortgage loan in India. Unlike commercial purchase loans, this loan can be used for business or residential property.

Borrowers need to mortgage their current property as security until the loan is cleared. They can use this loan amount for personal needs or professional purchases.

A loan against a property usually has a longer tenure, like 15 to 20 years.

Second Mortgage

If you have a property already under a loan, you can get a second loan with the property as a mortgage. It’s basically like a top-up loan on your existing loan.

To avail of a second loan, borrowers need to have a good credit score that demonstrates their ability to repay both loans.

Reverse Mortgage

It is a new loan option in the Indian market specifically designed for senior citizens.

If senior citizens have an asset or property they own, they can use it as a mortgage to get a fixed monthly income. On the owner’s death, the financial institution has a right to sell the property, and the loan paid to the senior citizen is deducted from the sale proceeds of the property.

Any excess leftover amount from the sale is given to the legal heirs of the deceased owner.

Eligibility Criteria for Mortgage Loan

To apply for a mortgage loan, you need to fulfill certain eligibility criteria, the most important one being that you are above 21 years of age. Some other criteria that you need to fulfill are:

  • Minimum required monthly income
  • Minimum age requirement of 21 years
  • An accurate valuation of your property
  • Income proof documentation
  • Existing liabilities

If you meet the eligibility criteria, you can use a Mortgage loan interest calculator to compare the interest rates and your potential EMIs from different financial institutions before you apply for the mortgage loan.

Documents for Mortgage Loan

Getting a mortgage loan requires that the applicant submit all documents required by the lender. The borrower’s income proof and property documents used as a mortgage are the most important ones. 

Some other documents that are required for mortgage loans include the following:

If you’re a salaried individual, you need:

  • Loan application form
  • Passport-size photographs
  • Identity proof, like PAN card, Aaadhar card, voter ID card, etc.
  • Address proof, like an electricity bill or Aaadhar card
  • Latest salary slips
  • Form 16 issued by the employer
  • Last 6 months’ bank statements

If you’re self-employed, you need:

  • Loan application form
  • Passport-size photograph
  • Identity proof, like PAN card, Aaadhar card, voter ID card, etc.
  • Address proof, like an electricity bill or Aaadhar card
  • Business proof
  • Financial statements for the last 3 years
  • Latest income tax return certificates


Anyone can apply for a mortgage loan if they meet the eligibility criteria and have all the required documents. A mortgage loan interest rate calculator can help you determine the interest against the value of the mortgage. It’s always a good idea to compare lenders, interest rates, and ease of application before finalizing your loan.

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