Secure Ways To Reduce Your Mortgage Loan In India

Mortgage loans have become a popular way for people in India to purchase homes and properties. While it offers the convenience of homeownership, it also comes with the responsibility of paying off a significant debt over several years. Most mortgage loans in India come with a fixed rate of interest that could fluctuate depending on the market conditions. This article will provide you with safe and secure ways to reduce your mortgage loan in India.

What is a Mortgage Loan?

Before we dive into reducing mortgage loans, let us first look at what it means. A mortgage loan is a type of loan in which a borrower places their property or home as collateral in exchange for the loan. It is a way to finance homeownership without having to front the entire amount. The lender is the one who pays for the property’s value, and the borrower repays the loan amount with interest over a specific period. The borrower has to pay a fixed amount every month to ensure that the loan is paid off within the stipulated time.

Mortgage loan – Meaning

Simply put, a mortgage loan is a way for people to finance their home purchases. It is a type of loan secured by the property itself. The lender will commonly require an appraisal of the property to ensure that it is worth the amount being lent. It can be a great opportunity for those who do not have the full amount to finance their home. In exchange for the loan, the borrower promises to pay back the amount with interest over time.

Mortgage loan rate of interest and mortgage loan rates

The mortgage loan rate of interest is the amount of interest charged by the lender for the loan. It is typically calculated as a percentage per annum of the loan amount. The interest rate on mortgage loan  varies and can fluctuate depending on various factors such as economic conditions, lending availability, borrower profile, and competition among lenders. The higher the interest rate, the more the borrower will pay during the loan term, making the housing loan more expensive.

Reducing mortgage loan with secure ways

Mortgage loans are an excellent way to become a homeowner, but paying off the loan can be stressful, especially if you are facing financial challenges. Here are a few strategies you can use to reduce your mortgage loan in India:

1) Pay more than the minimum required monthly payment

Many people only pay the minimum amount required monthly, but paying more will save you a significant amount in interest over time. This approach is known as accelerating your mortgage payment. For instance, if the monthly payment required is Rs. 35,000, paying an additional Rs. 5000 every month will reduce the loan amount over time and, ultimately, reduce the interest paid on the loan.

2) Refinance your mortgage

Refinancing your mortgage offers an opportunity to get a lower interest rate, which can translate into a significant reduction in your loan amount. If you qualify for a lower interest rate, you can refinance the mortgage loan and pay lower monthly payments while accruing less interest over the life of the loan.

3) Use lump-sum amounts

Receiving a lump-sum amount, such as a bonus, inheritance, or other windfall, can be used to pay down your mortgage loan. Consider investing it in your mortgage instead to reduce your loan amount and pay off your loan faster ultimately.

4) Prepayment of mortgage loan

Prepayments are a way to make an additional payment on your mortgage loan, reducing the principal amount and thereby the interest accrued over time. Prepaying mortgage loans can save you significant amounts of money in interest over the long term and can help you to be debt-free faster.

Types of mortgage loans

There are various types of mortgage loan products in India, and it is essential to know the variety of mortgage types to make an informed decision.

Read Also: How to Compare and Choose the Best Mortgage Loan Rate of Interest Rates for Your Needs

1) Fixed-rate mortgage

Fixed-rate mortgages have an unchanged interest rate throughout the loan term. This mortgage loan type offers stability since the borrower knows exactly what they will pay over the loan term.

2) Adjustable-rate mortgage

Adjustable-rate mortgages have an interest rate that fluctuates with the market trends and can be unpredictable. The interest rate can change, impacting the borrower’s monthly payment over the life of the loan.

3) FHA mortgages

FHA mortgages are loans that are insured by the Federal Housing Administration. This loan option has less stringent requirements than traditional loans, making it accessible to those who may have difficulty securing a loan through traditional methods.

4) VA mortgages

VA mortgages are a unique type of mortgage loan product in India. They are designed for veterans and active members of the military, and they offer benefits such as no down payment requirements and lower credit score requirements.

Read Also: 10 Important Factors That Influence Your LAP Interest Rates Online


Mortgage loans can be an excellent option for those looking to purchase a home or property in India. However, it is crucial to understand the mortgage loan type, interest rates and secure ways to reduce the loan amount. Homeowners can take advantage of various strategies to reduce the mortgage loan amount, such as pre-payments, refinancing, and saving lump-sums. By being proactive in mortgage loan repayment, homeowners can not only reduce their debt burden but also help secure the financing of additional ventures in the future.

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