Types of Mortgage in India: Eligibility, Loan Examples & Largest Lender | B.B Construction
Explore the types of mortgage in India, eligibility for a mortgage, example of mortgage loan, mortgagor vs borrower, and who is the largest mortgage lender in India. A complete property finance guide by B.B Construction.
Introduction
The decision to purchase a home or invest in real estate is one of the most significant financial commitments an individual can make. In India, where property prices continue to rise steadily, mortgage financing plays a crucial role in enabling buyers to turn their ownership goals into reality. Whether you are purchasing a residential apartment, constructing a house, or investing in commercial property, understanding mortgage mechanisms is essential.
A thorough understanding of the types of mortgage in India helps buyers select the most suitable loan structure, manage long-term repayment obligations, and avoid legal or financial complications. For clients working with B.B Construction, mortgage awareness ensures smoother transactions, better financial planning, and informed decision-making.
This detailed guide explores the types of mortgage in India, presents a practical example of a mortgage loan, explains eligibility for a mortgage, clarifies what is the difference between mortgagor and borrower, and answers a critical question for buyers: Who is the largest mortgage lender in India.
Understanding the Concept of Mortgage in India
A mortgage is a legal agreement under which a borrower pledges immovable property as security to obtain a loan from a bank or financial institution. The borrower retains the right to use the property while repaying the loan in periodic instalments. Until the loan is fully repaid, the lender holds a legal charge over the property.
In India, mortgages are regulated by the Transfer of Property Act, 1882, which formally defines the rights, duties, and liabilities of the borrower, lender, mortgagor, and mortgagee. This legal framework ensures protection for both parties and standardises different mortgage structures.
For real estate buyers associated with B.B Construction, understanding these fundamentals is the first step toward secure property ownership.
Types of Mortgage in India
There are several legally recognised types of mortgage in India, each catering to different borrower needs, risk preferences, and repayment models. Selecting the right mortgage type can influence interest rates, repayment flexibility, and ownership rights.
1. Simple Mortgage
A simple mortgage is one of the most widely used types of mortgage in India. In this arrangement, the borrower offers the property as security without transferring possession. The borrower remains in control of the property while repaying the loan.
If the borrower defaults, the lender has the right to sell the property through legal means to recover outstanding dues. This mortgage type is commonly used for standard home loans due to its clarity and borrower-friendly structure.
2. Mortgage by Conditional Sale
In a mortgage by conditional sale, the borrower appears to sell the property to the lender with specific conditions attached. If the loan is repaid within the agreed period, the sale becomes void. If repayment fails, ownership transfers permanently to the lender.
Although this is one of the older types of mortgage in India, it is still legally valid and may be used in private lending scenarios or customised agreements.
3. Usufructuary Mortgage
In a usufructuary mortgage, possession of the property is transferred to the lender. Instead of receiving monthly EMIs, the lender recovers the loan amount through income generated by the property, such as rent or agricultural produce.
Among the traditional types of mortgage in India, this structure is more common in rural and agricultural regions, where regular cash flow may not be feasible for borrowers.
4. English Mortgage
An English mortgage involves transferring ownership of the property to the lender with a contractual obligation that ownership will revert to the borrower once the loan is fully repaid.
This mortgage type is preferred for high-value properties and commercial real estate transactions. It is regarded as one of the more secure and transparent types of mortgage in India.
5. Mortgage by Deposit of Title Deeds (Equitable Mortgage)
This is the most commonly used mortgage format by banks and housing finance companies today. Under this arrangement, the borrower deposits original title deeds with the lender as security.
Among all types of mortgage in India, equitable mortgages are favoured due to lower legal costs, faster processing, and minimal documentation. Most urban home loans fall under this category.
6. Anomalous Mortgage
An anomalous mortgage is a customised mortgage that does not fit into standard categories. It may combine features of multiple mortgage types based on mutual agreement between the borrower and lender.
While flexible, this is one of the more complex types of mortgage in India and requires careful legal review before execution.
Example of Mortgage Loan
To understand the practical application of mortgages, consider the following example of mortgage loan:
Mr. Ahmed plans to purchase a residential apartment worth ₹90 lakh through B.B Construction. He pays ₹25 lakh as a down payment and applies for a mortgage loan of ₹65 lakh from a reputed bank.
The bank sanctions the loan under an equitable mortgage arrangement. Mr. Ahmed deposits the original property title deeds with the bank and agrees to repay the loan over 25 years through monthly EMIs. Upon full repayment, the bank releases the documents, and the mortgage is legally closed.
This example of mortgage loan clearly illustrates how buyers can leverage mortgage financing to acquire property while spreading repayment over a manageable period.
Eligibility for a Mortgage in India
Meeting the eligibility for a mortgage criteria is essential for loan approval. Lenders assess several parameters to ensure the borrower’s repayment capability.
Key Factors Determining Eligibility for a Mortgage
Age Criteria
Applicants must typically be between 21 and 65 years at loan maturity to meet eligibility for a mortgage.
Income and Financial Stability
Stable and sufficient income is the most important factor for eligibility for a mortgage. Lenders assess income-to-obligation ratios to determine affordability.
Credit Score
A credit score of 750 or above significantly enhances eligibility for a mortgage and helps secure favourable interest rates.
Employment or Business Stability
Continuous employment or a stable business track record improves eligibility for a mortgage.
Property Legal Compliance
The property must have clear title, proper approvals, and acceptable valuation to satisfy eligibility for mortgage requirements.
What Is the Difference Between Mortgagor and Borrower?
A frequently asked legal question is: What is the difference between mortgagor and borrower?
- The borrower is the individual who takes the loan and is legally responsible for repayment.
- The mortgagor is the individual who provides the property as collateral for the loan.
In most home loan cases, the borrower and mortgagor are the same person. However, in joint ownership or family property situations, they may differ. Understanding what is the difference between mortgagor and borrower is crucial for accurate documentation and legal compliance.
Who Is the Largest Mortgage Lender in India?
Buyers often want to know: Who is the largest mortgage lender in India?
Currently, State Bank of India (SBI) is widely recognised as the largest mortgage lender in India based on total home loan portfolio, customer base, and nationwide presence.
Other prominent mortgage lenders include:
- HDFC Ltd
- LIC Housing Finance
- ICICI Bank
- Axis Bank
Knowing who is the largest mortgage lender in India helps buyers choose institutions known for reliability, transparency, and competitive interest rates.
Why Mortgage Awareness Is Crucial for Property Buyers
For clients of B.B Construction, mortgage awareness offers several advantages:
- Better financial planning and budgeting
- Informed property selection
- Smooth legal and documentation processes
- Reduced risk of loan rejection or future disputes
A strong understanding of the types of mortgage in India, combined with clarity on eligibility for a mortgage, ensures confident and secure property investments.
How B.B Construction Supports Buyers with Mortgage Guidance
At B.B Construction, we provide end-to-end assistance by:
- Explaining all major types of mortgage in India
- Helping buyers assess eligibility for a mortgage
- Clarifying legal aspects such as what is the difference between mortgagor and borrower
- Guiding clients toward reputed banks, including insights on who is the largest mortgage lender in India
Our approach is transparent, client-centric, and focused on long-term value.
Making the Right Mortgage Choice: A Strategic Conclusion for Confident Property Ownership
Mortgage financing is the foundation of modern property ownership in India. With multiple types of mortgage in India available, buyers must evaluate options carefully based on income stability, long-term goals, and property usage.
A clear example of mortgage loan, thorough understanding of eligibility for a mortgage, and awareness of what is the difference between mortgagor and borrower eliminate uncertainty from the buying process.
Choosing trusted financial institutions—and knowing who is the largest mortgage lender in India—adds an extra layer of security to your investment. With expert guidance from B.B Construction, your journey toward property ownership becomes structured, informed, and future-ready.
