Mortgage Loan

A mortgage loan, often referred to as a home loan, is a type of secured loan used to finance the purchase, construction, or renovation of real estate property. The borrower receives funds from a financial institution (like a bank or housing finance company) and agrees to repay it over time through EMIs (Equated Monthly Installments).

The property being purchased or constructed is used as collateral, giving the lender a legal claim over it if the borrower defaults on repayments.

Key components of a mortgage loan include:

• Principal: The actual amount borrowed

• Interest rate: Can be fixed or floating, charged on the principal

• Loan tenure: The duration (typically 10 to 30 years) over which the loan is repaid

• EMI: Monthly payments including both principal and interest

• Down Payment: A percentage of the property value paid upfront by the borrower