A mortgage loan is a popular financial product which is offered to eligible applicants at attractive interest rates. Mortgage loan interest rates differ not only from one lender to another but also for different applicants due to various factors.
For instance, the interest rates for self-employed applicants differ from the salaried ones. Furthermore, several factors influence the mortgage loan rates like loan against property interest rates as well.
Factors that influence the rate of interest
These are among the most prominent factors which influence the rate of interest levied on a loan against property.
CIBIL score
Applicants with a CIBIL score higher than 750 and a clean credit history are better positioned to negotiate for an attractive rate of interest.
Down payment
Borrowers who opt to make a higher down payment are more likely to pay a lower rate of interest on the loan value. It further lowers the overall cost of availing a mortgage loan.
Interest type
Rates for home mortgage loan or loans against mortgage can either be fixed or floating. When it comes to fixed rates, they do not usually change over time. In case of floating rates, they tend to fluctuate and can increase or decrease than the initial rate based on the market trend.
Loan tenor
Generally, loans that are availed for a shorter term come with lower rates of interest and lower processing charges. Contrarily, their EMIs are significantly higher.
Other than these, the market value of the property and the loan value impacts the mortgage loan interest rates. Regardless, individuals must also weigh in the features of the loan option to strike a better bargain.
Additional Read : How to Use a Mortgage Loan Calculator
