Mortgage loans are one of the safest financing options for individuals looking for emergency funding but cannot afford the high interest rates of unsecured credits. Being a secured loan, interest rates are comparatively cheaper, making property loans easier on the pockets.
Interest rates for mortgage loan for self-employed individuals range between 10.50% and 14.50%.
Nonetheless, there are some factors that may have a negative impact on mortgage loan interest rates which one should know about -
- Property type
The LAP Loan amount extended by a lender is decided based on the type of property and its current market value. For instance, a commercial and residential property carries different values and, therefore, will have different interest rates. Similarly, if the property offered as a mortgage is in a remote location with a poor resale value, lending institutions will charge a higher interest rate.
- Borrowers’ profile
An applicant’s profile, such as his/her age, income, employment, also plays a major role in deciding the mortgage loan interest rates. For instance, if a salaried individual of age 55 years or above applies for a mortgage loan, he or she will be levied a high interest rate as they will soon retire from their job, which will impact their repayment capability.
Hence borrowers should check what is mortgage loan interest rate before applying and opt for a lender offering affordable loan against property rates.
Prospective applicants should consider using a loan against property calculator, which is an online tool provided by most financial institutions to compare various loan options. To use the calculator, one should enter the following information –
- Loan tenor.
- Property loan interest rates.
- Required loan amount.
Based on this information, the calculator will compute the total interest payable, the overall amount due to the lender and EMI amount, which will aid applicants to frame a suitable repayment plan.
Additional Read : A Brief Introduction to Mortgage Loans
