Top 10 Hidden Charges That Are Associated with Home Loans - Home Loan Stories | Kotak Mahindra Bank
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25 JUNE, 2021

We often require a lump sum amount to fulfil certain requirements such as a wedding, higher education, real estate, medical care, etc. During such times, most individuals turn towards loans. With so many products available in the market, you surely might have heard of home loans and loan against property, also known as mortgage loans. To invest in real estate, many borrowers prefer opting for a home loan as the end-use is fixed. However, when it comes to other financial needs, a mortgage loan can come to your rescue, as it does not have any limitations on the end-usage.

As you may already know, home loans help you finance the property purchase. But for mortgage loans or a loan against property, you borrow money by keeping your existing property as security. And the funds from such a loan can be utilised for a variety of purposes. Find out how the home loan interest rates are lower when compared to mortgage loans.

 

Interest Rate of Home Loans Vs Mortgage Loans

When you consider the home loan interest rates against the mortgage loan rates, you shall discover that the latter is more expensive. This is because the asset being mortgaged could lose value over the years. However, if you want funds for emergency reasons, you may find a loan against property to be a more lucrative option due to the increased repayment tenure of up to 15 years.

But home loans are available at lower interest rates in comparison to personal or gold loans. In case you want to avail a lower home loan interest rate, you can also switch lenders after a certain period by opting for home loan balance transfer from existing lender to another at a lower rate of interest. . But for this, you must have a good track record of loan repayment and credit score.

As explained above, while the rate of interest on a mortgage loan is higher compared to a home loan, the reason behind opting for either of them is completely different. Therefore, you cannot consider both of these financing options as similar or interchangeable. However, many individuals also choose to apply for a loan against property to purchase another house instead of taking a second home loan. By reviewing your financial repayment ability and the tax benefits available under both, you can select a more suitable option.

The loan that you apply for would depend on your needs. If you need a home loan or a loan against property, you can opt for either of them from Kotak Mahindra Bank! You can check your eligibility for the loan of your choice, today.

 

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.