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Mortgage Calculator
Calculate Loan Against Property EMI & Interest
Loan Details
Maximum Loan: ₹37,50,000 (75% of property value)
Typical range: 9% - 12%
About Loan Against Property
A secured loan where you pledge your property as collateral. Lower interest rates than personal loans, with flexible usage for any purpose - business expansion, education, medical expenses, or debt consolidation.
EMI Breakdown
Payment Breakdown
EMI Formula
EMI = [P × r × (1 + r)^n] / [(1 + r)^n - 1] Amortization Schedule
| Month | Beginning Balance | Principal | Interest | Ending Balance |
|---|
Key Features of Loan Against Property
High Loan Amount
Get up to 75% of your property value as loan. Higher amounts compared to personal loans.
Lower Interest Rates
Typically 9-12% per annum. Much lower than personal loan rates (15-20%).
Flexible Usage
Use for any purpose - business, education, medical, or debt consolidation.
Long Tenure
Repayment period up to 15-20 years for comfortable monthly EMIs.
Retain Property
Continue to use your property while it remains as collateral for the loan.
Tax Benefits
Interest paid may be tax-deductible if used for business purposes.
Mortgage Calculator: Complete Guide to Loan Against Property in India
A Loan Against Property (LAP), also known as a mortgage loan, is a secured loan where you pledge your residential, commercial, or industrial property as collateral to obtain substantial funds. Unlike a home loan that's specifically for purchasing property, LAP offers flexible end-use—whether for business expansion, medical emergencies, children's education, wedding expenses, debt consolidation, or any other legitimate financial need.
Our Mortgage Calculator helps you determine your monthly EMI (Equated Monthly Installment), total interest payable, and complete amortization schedule for your loan against property. With lower interest rates (typically 9-12% p.a.) compared to unsecured loans and higher loan amounts (up to 75% of property value), mortgage loans provide a cost-effective financing solution while allowing you to retain ownership and usage of your property.
This free mortgage calculator incorporates current lending norms, LTV (Loan-to-Value) ratios, interest rate structures, and EMI calculation formulas used by Indian banks and NBFCs. Get accurate projections to make informed borrowing decisions and plan your loan repayment strategy effectively.
Understanding Mortgage Loan Components
Property Value
The current market value of your property as assessed by the lender's approved valuer. Banks consider factors like location, property type, age, construction quality, legal compliance, and market conditions. Accurate valuation is crucial as it determines your maximum loan eligibility. Residential properties typically get better LTV ratios than commercial properties.
Loan Amount & LTV Ratio
The actual amount you borrow, typically 50-75% of property value (LTV - Loan-to-Value ratio). Higher LTV means larger loan but also stricter eligibility criteria. Residential properties can get up to 75% LTV, while commercial properties may be limited to 50-65%. Your credit score, income, age, and existing liabilities influence the approved LTV.
Interest Rate
The annual rate charged by the lender, typically 9-12% for LAP in India. Rates vary based on credit score, property type, loan amount, and tenure. Fixed rates remain constant throughout tenure, while floating rates fluctuate with market conditions (linked to repo rate). Lower interest rate significantly reduces your total interest burden over the loan tenure.
Loan Tenure
The repayment period, usually 5-20 years for mortgage loans. Longer tenure means lower monthly EMI but higher total interest cost. Shorter tenure increases EMI burden but saves significant interest. Your age, income stability, and retirement plans should guide tenure selection. Most lenders require loan closure before you turn 65-70 years old.
Monthly EMI
The fixed amount you pay every month, comprising both principal repayment and interest. EMI remains constant in fixed-rate loans but can vary in floating-rate loans when interest rates change. Your EMI should ideally not exceed 40-50% of your monthly income to maintain financial stability and meet other obligations comfortably.
Total Interest Payable
The cumulative interest amount paid over the entire loan tenure. In the initial years, a larger portion of your EMI goes toward interest payment (due to higher outstanding principal). As you progress, the principal component increases while interest decreases. Prepayments can dramatically reduce your total interest burden.
How to Use This Mortgage Calculator
- Enter Property Value: Input your property's current market value (₹5 lakh to ₹10 crore). This should be the valuation provided by the bank's approved valuer, not your purchase price or perceived value.
- Set Loan Amount: Choose how much you want to borrow, up to 75% of property value. The calculator shows your LTV ratio. Consider borrowing only what you need to minimize interest costs.
- Input Interest Rate: Enter the annual interest rate quoted by your lender (typically 9-12%). Check with multiple lenders as rates vary based on your credit profile and lender policies.
- Select Loan Tenure: Choose repayment period (1-20 years). Compare different tenures to find the optimal balance between affordable EMI and reasonable total interest payment.
- Review Results: Analyze your monthly EMI, total interest payable, total payment amount, and principal-interest breakdown. Ensure the EMI fits comfortably within your monthly budget.
- Check Amortization Schedule: Review the month-by-month breakdown showing how your outstanding balance reduces over time. This helps you understand your loan repayment journey and plan for prepayments strategically.
Practical Example: Business Expansion Financing
Scenario: Rajesh owns a commercial property worth ₹80 lakhs and wants to expand his manufacturing business. He needs ₹50 lakhs for machinery purchase and working capital. He takes a mortgage loan at 10.5% annual interest for 12 years, pledging his property as collateral.
| Parameter | Value | Details |
|---|---|---|
| Property Value | ₹80,00,000 | Commercial property valuation |
| Loan Amount | ₹50,00,000 | 62.5% LTV (within 75% limit) |
| Interest Rate | 10.5% p.a. | Competitive rate for commercial LAP |
| Loan Tenure | 12 years | 144 months repayment period |
| Monthly EMI | ₹72,208 | Fixed monthly payment |
| Total Amount Paid | ₹1,03,97,952 | Over 144 months |
| Total Principal | ₹50,00,000 | Original borrowed amount |
| Total Interest Paid | ₹53,97,952 | Interest cost over 12 years |
Key Insights:
- Rajesh's ₹72,208 monthly EMI is affordable at approximately 30% of his business income, leaving room for other expenses and savings.
- The total interest paid (₹53.98 lakhs) is 107.9% of the principal—nearly equal to the borrowed amount over 12 years at 10.5% rate.
- In year 1, approximately 70% of EMI goes toward interest and only 30% toward principal. By year 12, this reverses to 70% principal and 30% interest.
- If Rajesh makes a ₹5 lakh prepayment in year 3, he can save approximately ₹12-15 lakhs in interest and reduce tenure by 18-24 months.
- The interest paid on LAP for business purposes is tax-deductible as a business expense, reducing Rajesh's effective interest cost by 25-30%.
- He retains full ownership and usage rights of his property while leveraging it to grow his business—unlike selling the asset for liquidity.
Important Note: Loan Against Property is a secured loan where your property is collateral. Failure to repay EMIs can result in the lender invoking SARFAESI Act provisions and auctioning your property to recover dues. Always borrow within your repayment capacity, maintain an emergency fund for 6-12 months of EMIs, and ensure your business/income source is stable before taking substantial debt.
Why Using a Mortgage Calculator Matters
- EMI Affordability Assessment: Determine whether the monthly EMI fits comfortably within your budget before applying. Financial advisors recommend keeping EMI obligations below 40-50% of monthly income to maintain financial health and meet other goals.
- Tenure Optimization: Compare different tenure options to find the perfect balance between manageable monthly payments and reasonable total interest cost. See how extending tenure by 5 years reduces EMI but increases total interest by lakhs of rupees.
- Interest Cost Transparency: Understand the true cost of borrowing by seeing total interest payable. This helps you make informed decisions about whether to take the loan, the optimal loan amount, and prepayment strategies to minimize interest burden.
- Lender Comparison: Use the calculator to compare offers from different banks and NBFCs. Even a 0.5% difference in interest rate can save lakhs over a 15-year tenure. Negotiate better rates armed with this knowledge.
- Prepayment Planning: Review the amortization schedule to identify optimal prepayment timing. Making lump sum payments in early years (when interest component is high) yields maximum interest savings compared to later years.
- Loan Structuring Strategy: Determine the right loan amount and tenure based on your financial goals. If you need ₹60 lakhs but property value allows ₹70 lakhs, borrowing only what you need saves unnecessary interest costs.
Frequently Asked Questions
Loan Against Property (LAP) is a secured loan where you mortgage your existing residential, commercial, or industrial property to obtain funds for any legitimate purpose—business expansion, education, medical expenses, wedding, debt consolidation, or personal needs. The key difference from a home loan: Home loans are specifically for purchasing/constructing property with lower interest rates (7.5-9.5% p.a.) and longer tenure (up to 30 years), with principal repayment eligible for 80C deduction and interest for 24(b) deduction. LAP has higher interest rates (9-12% p.a.), shorter tenure (typically 15-20 years), flexible end-use, and tax benefits only if used for business purposes. In home loans, the property being purchased is the collateral; in LAP, you pledge existing property you already own. LTV ratios are also different: home loans offer 80-90% LTV, while LAP typically provides 50-75% LTV depending on property type.
Most banks and NBFCs accept the following property types for LAP: (1) Residential properties: Self-occupied or rented apartments, independent houses, bungalows, villas, or residential plots with clear titles. (2) Commercial properties: Office spaces, shops, showrooms, warehouses, or commercial complexes generating rental income. (3) Industrial properties: Factories, manufacturing units, or industrial land with proper approvals. The property must have clear, marketable title with no legal disputes, proper approvals from local authorities, and be within the lender's serviceable area. Properties in rural/remote areas, agricultural land, or properties with disputed ownership are generally not accepted. Self-constructed properties need completion certificates and municipal approvals. Inherited properties require succession certificates and all legal heir consents. Residential properties typically get better LTV ratios (up to 75%) and lower interest rates compared to commercial/industrial properties (50-65% LTV with slightly higher rates).
LAP eligibility criteria include: (1) Age: 25-70 years for salaried, 25-65 for self-employed at loan maturity. Some lenders extend up to 75 years. (2) Income: Minimum ₹25,000-₹50,000 monthly for salaried; ₹3-5 lakh annual income for self-employed. (3) Credit Score: Minimum 650, but 750+ gets better rates and higher LTV. (4) Property Ownership: You or co-applicant must be the legal owner with clear title. (5) Employment/Business Stability: Minimum 2-3 years for salaried, 3-5 years for self-employed. (6) Debt-to-Income Ratio: All EMIs should not exceed 50-60% of income. (7) Property Age: Most lenders prefer properties less than 20 years old; older properties may get lower LTV. (8) Documentation: Property papers, income proof, bank statements, IT returns, identity/address proof. Having co-applicant with good income improves eligibility. Existing relationship with the bank (salary account, previous loans with good track record) can help in better terms.
Fixed vs. Floating decision depends on market conditions and risk appetite: Fixed Rate (9.5-12% currently): EMI remains constant throughout tenure, providing payment certainty and protection against rate hikes. Best when interest rates are low and expected to rise. Disadvantage: you don't benefit if rates fall, and fixed rates are typically 0.5-1.5% higher than floating rates initially. Floating Rate (9-11.5% currently): Linked to repo rate or MCLR; EMI fluctuates with market conditions. Lower initial rates and you benefit when rates fall. Best when rates are high and expected to decline. Risk: EMI increases if rates rise. Current scenario (2024-25): With repo rates relatively stable after recent hikes, floating rates may be preferable for most borrowers. Some lenders offer hybrid options—fixed for initial 3-5 years, then floating. Consider your risk tolerance, loan tenure, and rate outlook. For short tenure (5-7 years), floating is usually better. For long tenure (15-20 years), a period of rate volatility is likely, so personal comfort matters more than prediction.
LAP involves several charges: (1) Processing Fee: 0.5-2% of loan amount + GST (typically ₹10,000-₹50,000 for ₹50 lakh loan). Non-refundable even if loan is rejected. (2) Property Valuation Fee: ₹2,000-₹5,000 depending on property value and type. Paid to bank-empanelled valuers. (3) Legal/Technical Fee: ₹5,000-₹15,000 for legal verification and technical assessment of property. (4) Administrative/Documentation Charges: ₹2,000-₹5,000 for document verification and processing. (5) Prepayment/Foreclosure Charges: Usually nil for floating rate loans; 2-5% of outstanding for fixed rate loans if closed within first 3-5 years. (6) Stamp Duty & Registration: Varies by state (0.1-1% of loan amount) for mortgage deed registration. (7) Insurance: Optional loan protection insurance covering death/disability. Some lenders may waive processing fees during festive offers or for high-value loans. Always factor these costs (typically 1.5-3% of loan amount) into your total borrowing cost when comparing lenders.
Yes, you can prepay LAP partially or foreclose completely. RBI guidelines (2014) mandate: (1) Floating Rate Loans: Zero prepayment/foreclosure penalty. You can make partial prepayments or close the loan anytime without charges. (2) Fixed Rate Loans: Lenders can charge penalties (typically 2-5% of outstanding principal) if closed before the fixed rate period ends. After the fixed period, no penalty. Prepayment Strategy: Making lump sum prepayments in the first 5-7 years yields maximum interest savings because interest component is highest then. Even ₹1 lakh prepayment in year 2-3 can save ₹2-3 lakhs in interest over tenure. Always request lender to reduce tenure rather than EMI when prepaying (saves more interest). Some lenders have minimum prepayment amounts (₹25,000-₹1 lakh) or allow only certain number of prepayments per year. Request updated amortization schedule and loan closure certificate after each prepayment. If you receive bonus, inheritance, or business profit, consider LAP prepayment as it typically has higher interest rate than home loans or FDs.
LAP default consequences are severe as it's a secured loan: (1) Immediate Impact: Late payment fees (₹500-₹2,000 per delayed EMI), negative marking on credit report (CIBIL score drops significantly—even one 30+ day delay impacts score). (2) 30-60 Days: Lender sends reminders and notices. Interest on overdue EMI continues to accumulate. Credit score continues to fall. (3) 90+ Days: Loan classified as NPA (Non-Performing Asset). Lender issues notice under SARFAESI Act 2002 demanding full payment within 60 days. (4) Post-Notice Period: If you don't respond, lender can take possession of property without court intervention. Property is auctioned to recover dues. Remaining amount (if any) is returned to you; shortfall (if any) remains your liability. Legal consequences: Your name is published in newspapers as defaulter, affecting reputation. Credit score drops to 300-400 range (takes 7 years to recover), making future loans nearly impossible. Prevention: If facing temporary hardship, immediately contact lender for restructuring, tenure extension, or moratorium. Many banks offer relief during genuine emergencies. Maintain 6-12 months EMI in emergency fund. Consider loan insurance for death/disability coverage.
Tax benefits on LAP depend on end-use: (1) Business/Professional Use: If LAP is for business expansion, working capital, equipment purchase, or professional needs, the interest paid is fully tax-deductible as business expense under Section 37(1) of Income Tax Act. No upper limit on deduction. Principal repayment is not deductible. (2) Personal Use: If LAP is for personal needs (education, wedding, medical, debt consolidation), there are NO tax benefits—neither on interest nor principal. This is unlike home loans where you get ₹2 lakh interest deduction under 24(b) and ₹1.5 lakh principal under 80C. (3) Property Purchase/Construction: If LAP proceeds are used to purchase/construct another property, interest up to ₹2 lakh annually is deductible under Section 24(b). (4) Documentation: Maintain clear proof of how LAP funds were used. If for business, ensure proper accounting and CA certification. For salaried employees running side business, claim deduction in ITR-3/ITR-4. The effective interest rate after tax benefit can be 7-8% instead of 10-11% for high-income individuals in 30% tax bracket using LAP for business purposes. Consult a CA to optimize tax benefits based on your specific usage.
Renting: Yes, you can rent out your property even while it's mortgaged for LAP. You retain full usage rights and rental income. Some lenders even prefer rented properties as rental income improves your loan eligibility and debt-servicing capacity. You must inform the tenant that property is mortgaged (though not legally mandatory). Rental income is taxable but you can claim standard deduction (30% of annual rent) and interest on LAP (if used for property) under Section 24(b). Selling: Selling mortgaged property is complex but possible with lender's consent. Process: (1) Find a buyer and negotiate price. (2) Inform your lender about the sale. (3) Buyer pays the loan outstanding amount directly to lender; remaining amount comes to you. (4) Lender issues No Objection Certificate (NOC) and releases mortgage. (5) Complete normal sale deed registration. Some lenders charge foreclosure fees (typically nil for floating rate). The buyer cannot take over your loan (loan assumption is not allowed in India). If property value has appreciated significantly, selling might be good to unlock capital, pay off LAP, and reinvest the profit. However, selling primary residence has tax implications unless exempted under Section 54/54F.
LAP approval timeline is typically 15-30 days depending on documentation completeness and property verification. Process: (1) Application (Day 1-2): Submit application form with basic documents—identity proof (Aadhaar, PAN), address proof, income proof (salary slips/bank statements/IT returns), property papers. (2) Credit Assessment (Day 3-5): Lender checks your credit score, income stability, existing liabilities, and repayment capacity. (3) Property Valuation (Day 7-10): Bank-empanelled valuer inspects property, prepares valuation report covering market value, legal status, construction quality. (4) Legal & Technical Verification (Day 10-15): Lender's lawyers verify title deed, check for encumbrances, pending litigation, proper approvals. Technical team assesses property condition, age, structural stability. (5) Approval (Day 15-20): Credit committee reviews all reports and approves loan amount, interest rate, tenure based on your profile and property value. (6) Sanction & Documentation (Day 20-25): Loan sanction letter issued. You sign loan agreement, mortgage deed, post-dated cheques/NACH mandate. (7) Disbursement (Day 25-30): After stamp duty payment and mortgage registration with sub-registrar, loan amount is disbursed to your account. Quick processing (7-10 days) possible with complete documentation, high credit score, and simple property titles.