Loan Against Residential Property

Loan Against Residential Properties: Loan against a residential property is one of the most preferred type of mortgage loan offered by Banks and NBFCs in India as banks feel a borrower will never willingly default on a loan which has been borrowed against a self-occupied residential property. Many lenders in India fund a LAP loan only against residential properties and not against any other type of property. Loan to valuation ratio for loan against residential property goes up to 70 percent of the current market value of the property. LAP against residential property is often borrowed by Salaried as well as self-employed borrowers. Salaried individuals get a better rate of interest compared to self-employed borrowers. Leading provider of Loan against Residential property includes HDFC Bank, ICICI Bank, Axis Bank, SBI and Kotak Mahindra Bank.

Loan Against Residential Property Interest Rate

Rate of Interest Loan Against Residential Property

Interest Rate

8.75% to 14.00%

Processing Fees

0.25% to 1.50% + GST

Pre-part payment charges

0 to 4% of the part payment amount

Foreclosure/Early closure charges 

0 to 4.00% the outstanding loan amount

Loan Tenure

1 to 20 years, depending on loan eligibility

Late payment Fees

Applicable and varies with lenders

Eligibility for Loan Against Residential Property

including Indians resident salaried individuals, self-employed business owners, professionals and firms and companies are eligible to take a loan against residential property from Banks and NBFCs. Only salaried NRIs are eligible to take a loan against property from bank but most of the banks don’t lend a LAP loan to self-employed NRIs. Minimum net monthly income required to apply for a residential property LAP loan is Rs. 25, 000/- and age of the applicants should be more than 21 years at the time of applying for the loan. All the property owners have to compulsorily be an applicant or co-applicant in the loan. Loan amount a lender will fund against a residential property goes up to 70% of the current market value of the property. Its highest for a self-occupied property and lowest for a vacant property.

Read More about Eligibility for Loan Against Residential Property

Loan Against Residential Property Benefits & Features

  • Loan Amount: Under Mortgage loan against residential property, lenders offer a loan amount up to Rs. 20 Crores or more, depending on income eligibility of the loan applicant/s and market valuation of the property
  • Tenure of Loan: Term of a LAP loan against a residential property varies from 5 years to 20 years.
  • Pre-Payment Charges:zero to 4 percent of the pre-payment amount.
  • Foreclosure Charges:zero to 4 percent of the outstanding loan amount, most of the banks offer zero penalty on foreclosure of a loan to salaried and individual borrowers.
  • Co-Applicants Required:a co-applicant is required for a loan against residential property, all the property owners should be co-applicant in the loan.
  • Security:Self-occupied, vacant or a rented residential property
  • Guarantor:Not required
  • Loan Amount: up to 25 crores or more

Why choose Loan Against Residential Property

  • Unlike a gold loan where you mortgage the gold and compulsorily deposit it to the lender, in a loan against residential property you continue possessing the property and use it, while the loan is running with the lender. A borrower takes the disbursement of the loan only by depositing the title and legal documents of the property to the lender.
  • Banks and NBFCs offer one of the lowest interest rate for a Loan Against Residential Property
  • Simple application process to apply for a loan against residential property
  • Higher loan amount against the valuation of the property, which goes up to 70 percent of the current value of the property.
  • Quick approval process.
  • Option to pre-pay the loan without any charges.

Loan Against Residential Property Interest Rate of Top Banks & NBFCs

Lender’s Name Interest Rate Loan Tenure Processing Fees Minimum & Maximum Loan Amount
HDFC Bank 9.8 % - 12.3 % 10 years 0.5 % 1 Lakhs - 10 Cr
Axis Bank 9 % - 12 % 15 years 0.75 % 1 Lakhs - 25 Cr
ICICI Bank 9.25 % - 12.25 % 15 years Rs. 5000 1 Lakhs - 20 Cr
Standard Chartered Bank 8.9 % - 11 % 15 years 0.4 % 1 Lakhs - 20 Cr
Kotak Mahindra Bank 9.25 % - 9.75 % 10 years 0.75 % 1 Lakhs - 30 Cr
PNB Housing 9.4 % - 11.5 % 10 years 0.75 % 15 Lakhs - 20 Cr
Yes Bank 9.5 % - 12 % 15 years 0.75 % 1 Lakhs - 25 Cr
HDFC Limited 9.8 % - 12.3 % 15 years 0.5 % 1 Lakhs - 5 Cr
Edelweiss 9.25 % - 13 % 20 years 1 % 1 Lakhs - 20 Cr
LIC Housing Finance 9.5 % - 11.5 % 20 years 0.5 % 10 Lakhs - 10 Cr

Loan to Valuation Ratios for Loan Against Residential Property

Loan Against Property- Loan Amount of Valuation of the Property

Property Type




Residential Property

Up to 70%

Up to 65%

Up to 60%

Residential Plots

Up to 50%


Up to 50%

Are you interested in knowing more? Browse the below links

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News and Articles

Moody's says loan against property segment may rise in 2018

09 December 2017:The report states lenders are more wary of extending LAPs as small and medium enterprises (SME) are seeing a subdued environment. LAP segment may increase next year, but it may not hurt lenders greatly, said a Moody’s Investors Service report on Tuesday. It also said “Many SMEs in India have traditionally operated outside the auspices of tax authorities. With the implementation of GST and demonetisation, many more SMEs will come under the ambit of tax authorities and will have to pay tax for the first time, in addition to bearing associated compliance costs”. According to the Moody’s report, “Although property prices have continued to increase, year-on-year growth rates have moderated from the higher levels of 2015 and 2016 and this has also led lenders to tighten underwriting standards over the past year. As noted, we expect property prices to remain steady at around current levels in 2018.

Bajaj Finance to give new clients loans for mobile phone buys

25 October 2017:Bajaj Finance is now raising its risk profile by funding purchase of mobile phones and consumer durables to new customers other than its existing customer base after the segments like furniture and loan against property slowed down. “It (company’s share of mobile phone lending) ought to be bigger than the size of the consumer electronics market,” said Rajeev Jain, MD Bajaj Finance. “People change their phones and tablets faster than they change their television. For the two different segments, the consumer behaviour is very different.” The company, which does Rs 1,551 crore of digital financing, has seen a 63% jump in this segment in the second quarter. “We have taken four and a half years to crack this business segment (mobile product financing),” said Jain. “We are comfortable managing the credit risk of the mobile financing market. You would see it growing very healthy.”

ICICI Bank- ICICI Bank launches 1% 'cashback' Home Loans

28 September 2017:India’s largest private sector lender ICICI Bank announced a new home loan scheme that offers borrowers the benefit of 1% cashback on every EMI, for the entire tenure of the loan. The offer will be valid for home loans with a minimum tenure of 15 years to both residents as well as NRI borrowers and a maximum tenure of 30 years. Though, the cashback will receive only after a period of 3 years of EMI. ICICI bank declared, "This new home loan empowers borrowers to select their preferred mode of cashback. They can choose to utilise the cashback to prepay the principal outstanding of their home loan or take credit in their bank account."Interest rates of ICICI Bank home loan offer 8.35% for women and 8.40% for rest of the borrowers. Anup Bagchi, Executive Director, ICICI Bank said, "ICICI Bank catalysed the growth of retail lending in the country by making a home, auto and other retail loans widely accessible and affordable. We foresee that a combination of young population and rapid urbanisation will lead to the emergence of growing demand for housing in the country." This new home loans offering flexible cashback accruals methods for the customers. Customers can choose to adjust the cashback against principal outstanding of their home loan. Or, they can get it as direct credit in their bank account. The cashback will start to add from the first EMI itself. It will first get credited to the customer after completion of the 36th EMI. Subsequently, after every 12th EMI, it will get credited to the customer. So if the customer takes a loan of Rs 30 lakhs for a tenure of 30 years and decides to use the 1% cash back to prepay principal outstanding amount then the savings would be Rs 3,24,801. This new offer is also available for other mortgage products like a loan against property, lease-rental discounting and top-ups on existing mortgage loans.

Magma Fincorp, in order to grow its home loan business, is all set to shift its focus towards affordable segment

7 August 2017:Kolkata based Magma Fincorp to shift its focus from the loan against property segment. Instead it will focus on the affordable segment to grow its home loan business. According to Manish Jaiswal, M.D and C.E.O, while loan against property is targeted at the SME it is all the more risky. The total housing loan book also includes loan against property which is approximately Rs.2972 crores. “At present the share of home loan is close to 30% while loan against property is 70% of this total business. We intend to reverse this mix in the near future” as said by Jaiswal. During the current fiscal, Magma’s focus would be on bringing down the cost of the funds and managing asset quality even if that comes on the back of lower growth in business. ‘’Growth is secondary to the quality of the portfolio and profitability’’, as said by Kaushik Banerjee, CEO, Asset Finance, Magma.

Fincare Small Finance Bank plans to construct strong SME, self-employed base

26 July 2017:Karnataka based company Fincare is looking to build a strong SME and self-employed base for both assets and liabilities. “Overall we want to have a strong SME and self-employed base for lending as well as deposit over a period of time,” said Rajeev Yadav. The bank is spread over seven states. The bank is looking for an opportunity to build a secured loan book in order to minimize risk. In the next 2-3 years this will comprise 50% of total asset book. Currently, 93% of their book comprise of microfinance loans. “The path to become more secured book has accelerated for all institutions among secured portfolio, 30% will comprise of loan against property and rest will be loan against gold, affordable housing etc.” said Rajeev Yadav.

Reliance Home Finance June Quarter PBT rises to 45 Crore

21 July 2017:New Delhi- Reliance Home Finance has claimed that its profit has risen by 50% to 45 Crore for the June quarter of the current fiscal year. In the previous year the company’s profit before tax was Rs.30 Crore. It was said in a release that the total income for the quarter rose by 58% to Rs.374 Crore. The 100% fully owned subsidiary of Reliance Capital said it is on track to be independently listed on the stock exchange within a couple of months. “We expect robust changes in the loan book this year driven by affordable housing and loan against property segments our distribution capabilities through presence in more than 100 locations as said by Ravindra Sudhalkar ED and CEO, Reliance Home Finance PTI KPM ABM.

NBFCs all set to report best Q1 performance after many years

18 July 2017:The non banking finance companies are all set to generate 15%-30% rise in earnings boosted by a rise in mortgage lending and an increase in demand in farm equipment. The regular monsoons and farm loan waivers have lifted the expectations of the rural economy. The first quarter is expected to be driven by high growth induced by retail housing, strong collections from farm sector etc. The housing finance companies report for a profit about 17% to 20% due to a low cost of borrowing. However analysts have reckoned that there will be a decline in the cost of funds driven by extreme liquidity. While HDFC is expected to expand in the commercial sector LIC is likely to tap into the developer and loan against property. After demonetisation analysts see improving trends in growth across product segments in NBFCs. Bajaj Finance is expected to deliver 36% growth. All NBFCs excluding Bharat Financial are expected to show a healthy growth rate as said by Motilal Oswal.

Credit Suisse depicted growth for Bajaj Finance; worried about rising risk too

7 July 2017:The global research firm Credit Suisse said that Bajaj Finance is going to experience a strong growth which will be accompanied by rising risk portfolio without proportionate marginal cushion. The firm also said that that with riskier portfolio pushing loan growth, multiple expansion is difficult to justify.
“Risk is also rising within secured products—share of commercial loan against property (LAP) is rising (now 70%) vs residential while spreads fall,” the firm said in its report.
The brokerage firm said that the objective was to grow a loan mix and provides a cost benefit. While this is quite a sensible goal to aspire, the number shows that the progression of the company has been in the opposite direction and the share of unsecured loans has actually grown in last 3-4 years. The brokerage house also stated that even with in-house sourcing and tech adaption, we have not seen any benefits in the last three years.

Indostar Capital is all set to acquire ICICI Home Finance

3 July 2017:ICICI bank is all set to sell a majority stake in the company for Rs.2000 crore to Indostar Capital merely two years after putting its entirely owned subsidiary ICICI Home Finance on the block, as said by two people who are aware of this development.For a 67% stake in the company Indostar is supposed to pay Rs.2000 crores while the private sector lender will continue to be a minority shareholder in the company with 33% stake under its name.The deal will mark the end of the long selling process of the ICICI home finance which was close to being sold twice but did not succeed due to last minute disagreements.Some of the other interested contenders for ICICI home finance were India Value Fund Advisors, Baring Private Equity Asia and PE funds TPG. As reported by Mint last year, ICICI bank had almost finalised the deal with TPG for a 100% stake and the amount for the same being Rs2200 crore but at the same time IVFA and Bearing PE Asia also offered a higher price of Rs2400 crore. The deal will be done by December end. ICICI Home Finance reported a profit of Rs 183 Crore against Rs 180 Crore last year along with a loan book of Rs 9282 Crore. Indostar which is mostly into loan against property and corporate finance for the SMES is all set to broaden its scope through its subsidiary Indostar Home Finance as reported by Economic Times. The deal will fetch attractive valuation as the regulations are in favour of the bank raising long term borrowing for lending to housing as said by a banking analyst for Reliance Industries.

Axis Bank Home Loans, Personal Loans to Get Cheaper as cuts MCLR by up to 0.70%

19th January 2017:Axis Bank has reduced its MCLR up to 0.70%, now the MCLR for 1-year tenure which serve as the benchmark for Home Loans, Loan Against property and others, will be 8.25% down by 65 bps. Axis Banks overnight MCLR has come down by 0.65% to 7.90% and the highest cut of 0.70% is applicable for 3 month and 6 months MCLR which has been revised to 8.05% and 8.15% respectively. Axis Bank Home Loan, Axis Bank Personals are expected to get cheaper in coming days.

Loan Against Property Customer Reviews

Sharmila N
Deutsche Bank

Loan Against Property,Deutsche Bank, Bengaluru

Excellent and proactive service. I got to know about Balance Transfer provision through your Sales Manager and reduced my burden of paying higher interest

Devendar Singh
Axis Bank

Loan Against Property,Axis Bank, Bangalore

I found MyMudra Team professional, straightforward, and since they don't push you to apply for a specific bank, they are impartial. On a long term basis one needs an intermediary as a one stop shop and these guys seems to be in the business for long t

gaurav khorde
Axis Bank

Loan Against Property,Axis Bank, Mumbai

I am making an attempt to get a LAP loan from last three months, however, it isn't due to incomplete document. However, currently I got a loan from Axis Bank thanks mymudrafincorp for better guidance.

Santosh Dimble

Loan Against Property,Edelweiss, Pune

Thanks lots for process my Loan Againest Property in time. i might prefer to provide you with special thanks for the service given by you. Your personal visits to my workplace for all documentation. Got LAP loan from Edelweiss Bank

Chaya devi .M
IndusInd Bank

Loan Against Property,IndusInd Bank, Hyderabad

I am absolutely delighted with your service. It is really refreshing to work with a financial advisor who is truly interested in their clients needs, circumstances and preferences. What really impressed me was the way you took the time to get a feeli

Bandi Pratap
Punjab National Bank

Loan Against Property,Punjab National Bank, Bangalore

The whole process with My Mudra FinCrop Pvt Ltd has been an absolute pleasure?and such a positive experience for us. They were very sensitive to my needs and my tight time frame. Thank you very much.


Loan Against Property,Indiabulls, Bangalore

MyMudra Team was calling me continuously for the follow up. MyMudra Team given the best service, which was helped to get my loan at the best interest rates. I have applied for LAP without

Pankaj Kumar Mothilal

Loan Against Property,Indiabulls, Bangalore

I am happy to get service like My Mudra FinCrop. Which helped me to get my Loan Againest property in a better way.

Abdul Razak
L&T Finance

Loan Against Property,L&T Finance, Bangalore

Worst co-ordination after login no communication on status of loan. Documentation also not proper, will not recommend any more. Thank you.

Mani M
Punjab National Bank

Loan Against Property,Punjab National Bank, Bangalore

My Mudra FinCrop Team done the follow up in the good manner, also they does the things in the gentle manner. Team is really good understandable on my requirements, and given multiple options and got my homeloan from PNBHFL in quick time. Thank You very

Mohammed A Khaleel

Loan Against Property,Indiabulls, Bangalore

Its an user friendly Service. All banks details at one place with perfect explanation. No need to go any individual bank site or branch and explore. Anyways thanks to MyMudra Team..

pankaj sharma
Reliance Capital

Loan Against Property,Reliance Capital, Amravati

Very flexible service at the doorstep, Thanks My Mudra FinCrop for collecting documents and visiting bank for any query and all services for client satisfaction, i'm happy to have a LAP loan with PNB housing finance. My loan disbursed without troubli