What Are the Types
of Mortgage Loans?

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In India, there are several mortgage loan types, each designed to meet various needs. These include second mortgage loans, fixed-rate mortgages, and reverse mortgages. Fixed-rate mortgage options offer stable interest rates, while adjustable-rate mortgages (ARMs) types provide flexibility with changing rates.

Among these, Loan Against Property (LAP) is a popular choice. Let us explore the different types of mortgage loans and the options available through SMFG India Credit.

Types of Mortgage Loans

The following are the most common types of mortgage loans available in India

Loan Against Property

A Loan Against Property (LAP) is a type of mortgage in which borrowers pledge their residential or commercial property as collateral in exchange for funds that can be used for various personal or professional purposes.

Second Mortgage Loans

For properties already mortgaged, borrowers can choose to take out a second mortgage loan, also known as a top-up loan. This loan allows borrowers to access additional funds based on the property's equity and the borrower’s repayment history.

Reverse Mortgage Loans

Reverse mortgage loans cater to senior citizens, allowing them to convert their home equity into regular income while retaining property ownership. It ensures financial stability in retirement without the need to sell the home. Upon the borrower’s passing, the property is sold, and the loan amount is deducted from the sale proceeds.

Fixed-Rate Mortgage Options

Fixed-rate mortgage options provide borrowers with a stable interest rate and consistent monthly payments throughout the loan term, making it easier to budget and plan long-term finances.

Adjustable-Rate Mortgage (ARM)

Adjustable-rate mortgage (ARM) types offer an initial lower interest rate that can change periodically based on market conditions. This provides potential cost savings but also a risk of increased payments.

Mortgage Loans by SMFG India Credit

At SMFG India Credit, you can avail of mortgage loans under the segment of Loans Against Property. Here are some features of LAPs by SMFG India Credit:

High Loan Amount: Apply for a Loan Against Property up to INR 5 crores*, for various needs including business expansion, medical emergencies, or higher education.
Competitive Interest Rates: Benefit from attractive Loans Against Property interest rates, tailored to your eligibility and creditworthiness.
Easy Application: Experience a hassle-free online application process with minimal document requirements.
Flexible Repayment: Choose from flexible tenures going up to 15 years* for manageable repayments.
High Loan-to-Value Ratio: Up to 70%* of your property's market value, maximising your benefits.

Each type offers distinct benefits tailored to various financial goals and circumstances. With SMFG India Credit, you can get a customised LAP loan with attractive interest rates and a flexible repayment plan. Check out the LAP eligibility criteria and apply today to leverage your property.

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* Please note that loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms and disbursal process will be subject to SMFG India Credit's policy at the time of loan application. If you are an existing customer and wish to foreclose your loan, please note that foreclosure terms and charges will be applicable as per our policy at the time of loan foreclosure.

FAQs

What are the two main types of mortgages?

The two main mortgage loan types are fixed-rate mortgages and adjustable-rate mortgages (ARM). Fixed-rate mortgages offer a stable interest rate and consistent payments throughout the loan term. In contrast, adjustable-rate mortgages have interest rates that can change based on market conditions, offering potential cost savings but with some payment variability.

Under which type of mortgage loan does the lender give money to the borrower in the form of instalments?

In a reverse mortgage loan, the lender provides money to the borrower through monthly instalments. The loan amount is divided into periodic payments given to the borrower, usually senior citizens until the loan is repaid or the borrower passes away.

In a reverse mortgage loan, the lender provides money to the borrower through monthly instalments. The loan amount is divided into periodic payments given to the borrower, usually senior citizens until the loan is repaid or the borrower passes away. What is the difference between a mortgage and a home loan?

A home loan is specifically for purchasing, upgrading, or constructing a residential property, with the property as collateral. Mortgage loans are more flexible and can be used for various purposes as long as the property is pledged as collateral.