A mortgage loan is a type of loan that is secured by real estate or property. It is commonly used by individuals or businesses to purchase a home or commercial property.
Mortgage loans are a significant financial commitment, and it is crucial to research and compare different lenders, their interest rates, fees, and repayment terms before selecting the most suitable mortgage loan option.
The property being financed serves as collateral for the loan, which means that if the borrower fails to repay the loan, the lender has the right to seize the property and sell it to recover the outstanding balance.
The loan amount for a mortgage loan is determined based on the value of the property being financed. Lenders typically finance a certain percentage of the property's value, which can range from 75% to 90% of the property's market value.
Mortgage loans can have fixed or floating interest rates. Fixed interest rates remain constant throughout the loan tenure, while floating rates fluctuate with market conditions.
Mortgage loans generally have long repayment tenures, often ranging from 15 to 30 years. The repayment period depends on factors such as the borrower's age, income, and the lender's policies.
Homeowners in India can avail tax benefits on the principal repayment and interest paid on mortgage loans under the Income Tax Act, subject to certain conditions and limits. These benefits can help reduce the overall tax liability.
