Navigating Mortgage Loan Interest Rates: Key Factors and Trends

Mortgage loans are loans secured by security or collateral. Property owners can leverage the value locked in their property by pledging it as collateral or security and availing of a loan against it. Such loans are known as property loans, home mortgage loans or loans against property. 

They are one of the most popular financing options these days, primarily owing to the various benefits they offer, including low mortgage loan interest rates, long repayment tenor, and high loan amount. 

Mortgage loans also invariably involve a substantial amount of money and therefore, one must make every effort to secure the lowest mortgage loan interest rates so that the repayment journey remains fuss-free.

Here, we discuss some simple tips on how to avail yourself of the lowest mortgage loan interest rates. 

Mortgage Loan Interest Rates: How to Secure the Best Deal

Apply for a Loan Amount You Qualify For 

Under loans against property (LAP), borrowers can borrow up to 75% of their property’s value as a loan. However, borrowers must always calculate their eligibility using the loan against property eligibility calculator and then apply for a loan amount that they qualify for. 

The loan against property eligibility is an online tool that’s easy to use and that lets borrowers calculate the loan amount they qualify for based on various details, such as the current income and current EMI obligations, etc. 

When you apply for a loan amount you are eligible for, the chances of a loan default reduce considerably and therefore, lenders show more willingness to offer home mortgage loans at a lower rate of interest.

Pledge a High-Quality Collateral 

For mortgage loans, the risk for the lender is offset by the pledged collateral for in case of a loan default, the borrower can sell the pledged property for the recovery of the loan money.

Thus, the quality of the collateral plays a key role in ensuring the affordability of these loans. High-quality collaterals, i.e. properties located in central locations or properties built by highly reputed builders, have high resale value and therefore, such properties help loan borrowers avail of the lowest mortgage loan interest rates they can get. 

Maintain a High Credit Score 

An individual’s credit score is reflective of their attitude towards credit and its repayment. A high credit score indicates a responsible attitude towards credit, its usage and repayment. Individuals who have a high credit score do not pose a high risk to lenders and are therefore able to secure home mortgage loans at low interest rates. 

Maintaining a high credit score is quite easy if you pay all your loan EMIs and credit card bills on time, maintain a low credit utilization ratio, are not excessively dependent on credit, and have the right balance of both secured and unsecured loans. 

Opt for Floating Interest Rates 

Lenders offer mortgage loans on two different types of interest rates: fixed and floating. For fixed-interest rate loans, the mortgage loan interest rates stay the same through the tenor of the loan.

However, for floating interest rate mortgage loans, the rate of interest changes based on external market conditions. Floating-interest-rate mortgage loans help one avail of better loan terms and conditions as they are considered a less risky affair by lenders. 

Opt for a Low LTV Ratio Loan 

LTV ratio refers to the percentage of a property’s net total value that had been sanctioned as a loan. High LTV ratio loans involve higher loan amounts and therefore, when a borrower opts for a high LTV ratio loan, to cover up the risk involved for them, lenders charge a high rate of interest. 

On the other hand, low LTV ratio loans help borrowers avail themselves of lower interest rates. So, one must always borrow not what they are eligible for but what they need and can comfortably repay.


Other than the simple things mentioned above, negotiating with different lenders and using the offer letters extended by them to secure better offers will also work in your favour. If you are currently repaying a loan, you can consider opting for a home loan balance transfer if you find another lender willing to refinance the loan on better loan terms and conditions, including lower mortgage loan interest rates.

By Bravo

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