Loan Against Property EMI Calculator
Unlock the value of your property without selling it — see the EMI, total interest and year-wise balance on a loan against property.
Year-wise repayment
| Year | Principal | Interest | Balance |
|---|---|---|---|
| 1 | ₹79,155 | ₹2,34,112 | ₹24,20,845 |
| 2 | ₹87,011 | ₹2,26,256 | ₹23,33,834 |
| 3 | ₹95,647 | ₹2,17,621 | ₹22,38,187 |
| 4 | ₹1,05,139 | ₹2,08,128 | ₹21,33,048 |
| 5 | ₹1,15,574 | ₹1,97,693 | ₹20,17,474 |
| 6 | ₹1,27,045 | ₹1,86,223 | ₹18,90,429 |
| 7 | ₹1,39,654 | ₹1,73,614 | ₹17,50,776 |
| 8 | ₹1,53,514 | ₹1,59,754 | ₹15,97,262 |
| 9 | ₹1,68,750 | ₹1,44,518 | ₹14,28,512 |
| 10 | ₹1,85,498 | ₹1,27,770 | ₹12,43,014 |
| 11 | ₹2,03,908 | ₹1,09,360 | ₹10,39,107 |
| 12 | ₹2,24,145 | ₹89,122 | ₹8,14,961 |
| 13 | ₹2,46,391 | ₹66,876 | ₹5,68,570 |
| 14 | ₹2,70,845 | ₹42,423 | ₹2,97,726 |
| 15 | ₹2,97,726 | ₹15,542 | ₹0 |
What is a Loan Against Property (LAP)?
A Loan Against Property (LAP) — commonly known as a mortgage loan — is a secured credit facility where an individual, business owner, or enterprise pledges a fully constructed, freehold residential or commercial real estate property as collateral to secure long-term capital.
Because LAP is secured by high-value real estate, banks and housing finance companies (HFCs) offer significantly lower interest rates (typically 8.5% to 11.5% per annum) and much longer tenures (up to 15 to 20 years) than unsecured personal or business loans. Borrowers can secure loan amounts ranging from ₹10 Lakh up to ₹25 Crore+ for business expansion, debt consolidation, or major personal expenditures.
Loan-to-Value (LTV) Ratios, Property Valuation & Usage Flexibility
Key underwriting parameters governing Loan Against Property in India:
- Loan-to-Value (LTV) Cap: Lenders sanction loans based on independent legal and technical valuation of the property:
- Residential Property: Lenders typically finance 60% to 75% of the market value.
- Commercial Property: Lenders finance 50% to 65% of the market value.
- Industrial Property: Lenders finance 40% to 50% of the market value.
- Complete End-Use Flexibility: Unlike home loans (which can only be used to buy/build homes), LAP funds can be utilized for any legal purpose: working capital, business machinery, debt consolidation, wedding expenses, or higher education.
- Ownership & Occupancy: You retain complete possession, ownership, and operational usage of the property while the mortgage is active. The lender holds only the original title deeds (constructive mortgage).
The Mortgage Loan Amortization Formula
EMI = P × r × (1 + r)ⁿ ÷ [ (1 + r)ⁿ − 1 ]
- P — Net mortgage loan principal sanctioned (Property Market Value × LTV %).
- r — Monthly interest rate:
Annual Rate ÷ 12 ÷ 100(e.g. 9.5% → 0.095 ÷ 12 = 0.007917). - n — Total tenure in months (e.g. 15 years = 180 months; 20 years = 240 months).
Because interest rates are nearly 4% to 8% lower than unsecured personal loans, refinancing high-cost debt into a single LAP drastically lowers your monthly debt service outflow.
A Worked Example: ₹50,00,000 LAP at 9.5% for 15 Years
Financial Breakdown for a ₹50 Lakh Loan Against Property:
- Property Market Value: ₹80,00,000 (Sanctioned at 62.5% LTV)
- Sanctioned Loan Amount: ₹50,00,000
- Interest Rate: 9.50% p.a. (floating)
- Tenure: 15 Years (180 Monthly Instalments)
- Monthly EMI: ₹52,211.16
- Total Interest Paid: ₹43,98,008.20 (~₹43.98 Lakh)
- Total Repayment: ₹93,98,008 (~₹94 Lakh)
Comparing this to a 5-year unsecured personal loan of ₹50 Lakh at 14% (which requires a massive EMI of ₹1,16,341/mo), the LAP reduces monthly cash outflow by over ₹64,000 per month!
Loan Against Property EMI & Total Interest Across Tenures at 9.5% p.a.
| Loan Amount | 5 Years (60 mos) | 10 Years (120 mos) | 15 Years (180 mos) | Total Interest (15 Yrs) |
|---|---|---|---|---|
| ₹25,00,000 | ₹52,500/mo | ₹32,346/mo | ₹26,106/mo | ₹21,99,004 |
| ₹50,00,000 | ₹1,05,000/mo | ₹64,692/mo | ₹52,211/mo | ₹43,98,008 |
| ₹75,00,000 | ₹1,57,500/mo | ₹97,037/mo | ₹78,317/mo | ₹65,97,012 |
| ₹1,00,00,000 (₹1 Cr) | ₹2,10,000/mo | ₹1,29,383/mo | ₹1,04,422/mo | ₹87,96,016 |
| ₹2,00,00,000 (₹2 Cr) | ₹4,20,000/mo | ₹2,58,767/mo | ₹2,08,845/mo | ₹1,75,92,033 |
Monthly repayments computed on reducing balance at 9.5% p.a. Excludes property legal search, valuation fees, and title insurance.
Tax Deductions on Loan Against Property: Utilization Rules
Tax benefits on a Loan Against Property depend strictly on where the borrowed funds are deployed:
- Used for Business Expansion (Section 36(1)(iii)): If LAP proceeds are injected into a business or professional firm, 100% of the interest paid is fully deductible as a business expense, reducing taxable commercial profit.
- Used for Residential House Renovation (Section 24(b)): If deployed for the repair, renovation, or improvement of a residential property, interest up to ₹30,000 per year is deductible under Section 24(b) (Old Tax Regime).
- Personal Consumption: If used for weddings, vacations, or general living expenses, no income tax deduction is available on either principal or interest.
Loan against property questions, answered
Crucial answers on property eligibility, LTV ratios, interest tax deductibility, and debt consolidation benefits.
A Home Loan is taken specifically to buy or construct a new residential home, with interest deductible under Section 24(b) and principal under Section 80C. A Loan Against Property is a mortgage loan taken against an existing owned property, and funds can be used for any personal or business purpose.
Lenders accept fully constructed, freehold residential properties (independent houses, apartments), commercial properties (offices, retail shops), and select industrial properties. The property must have a clear, marketable title without legal encumbrances.
Banks and HFCs generally sanction 60% to 75% of market value for residential properties, 50% to 65% for commercial properties, and up to 50% for industrial real estate, based on independent technical valuation.
Yes, if the borrowed capital is deployed into a business or profession, 100% of the interest is tax-deductible under Section 36(1)(iii). If used for house renovation, up to ₹30,000/year is deductible under Section 24(b). If used for personal consumption, no tax deduction applies.
Yes. However, all legal co-owners of the property must join as co-borrowers in the loan application. This includes spouses, siblings, or parents whose names appear on the registered title deed.
Under RBI guidelines, if an individual borrower avails an LAP on a floating interest rate for non-business purposes, lenders cannot charge any prepayment penalty. However, for fixed-rate loans or loans availed by corporate entities/firms, prepayment charges of 2% to 4% plus GST apply.
Lenders offer tenures of up to 15 to 20 years (180 to 240 months), provided the primary borrower's age does not exceed 65 to 70 years at the time of scheduled loan maturity.
Yes! You retain full physical possession, occupancy, and rental rights over the property. The lender holds only the original title deeds (equitable mortgage) as collateral security until the loan is fully repaid.
If you have multiple high-interest debts (credit cards at 36% p.a., personal loans at 16% p.a.), you can consolidate them into a single Loan Against Property at 9% to 10% p.a., substantially reducing your monthly cash outflow and cutting overall interest costs by more than half.
Key documents include: registered sale deed/conveyance deed, title search report for past 30 years, approved municipal building plan, occupancy certificate (OC), latest property tax paid receipts, and encumbrance certificate (EC) from the sub-registrar's office.