The value is based on Equated Monthly Installment (EMI)
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The values shown above are estimates only. The interest rate applied for the above calculation is the 5 year fixed housing loan interest rate and is subject to the assignment of salary to the bank. The final interest rate will be determined by the bank upon receipt of your supporting documents and evaluation.
What is a Mortgage / Home Loan?
A Mortgage or a Home Loan is a loan taken out to buy a property or land. Once a mortgage is taken, the borrower will need to pay off the loan amount plus the interest to the lender. If the borrower fails to pay the loan, then the ownership of the property or land will pass on to the lender.
How much can I borrow?
The amount that can be borrowed will ultimately be decided by the lender and is dependent on factors such as your income, other borrowings/loans that you may have and your current expenses.
What documents do I require to apply for a Home Loan?
Below are some of the documents that the banks will ask before they approve your loan:
Copy of NIC (National Identity Card) or Passport
Last 3 months’ salary slips
Letter from your employer confirming your particulars
Statements of bank account(s) to which the salary was remitted during at the last 3 months
Details of any other loans that you currently have
Marriage Certificate (for joint applicants)
I have a property that I'm interested in. Will you arrange the purchase of that for me?
The bank will only arrange the loan and you will need to arrange the purchase of the property by contacting the advertiser/agent of the property directly. Once the owner or agent for the property has accepted your offer, you can contact the bank regarding the loan.
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Housing Loan Calculator
Today with the rising prices of materials and land, financing a
house completely through your own money is not a luxury that many can afford.
There is also the risk of losing your entire savings if you purchase the wrong property.
This when the option of obtaining a home loan comes into play. The limit for a mortgage loan
differs from bank to bank, along with the interest rates charged. However, the upper and lower
limits are regulated by the Central Bank and commercial banks and financial institutions have to
still abide by these. Yet, to maintain competition within themselves and attract borrowers, many customize
their policies with various offers and discounts.
A basic home loan from any bank offers you a capital amount and charges
an interest in return. They divide this total value into instalments and then
further offer monthly payment amounts. But the question that remains lingering in
a borrower’s mind is whether or not he can afford it. Though this would’ve been answered
differently years ago, now you can check this out for yourself by simply adjusting values
on an online home loan calculator. You can apply for a housing loan to construct a brand new house,
to renovate a house, to complete a partially built house or even settle a
housing loan obtained from another financial institution.
Banks calculate the instalment for these housing loans in 2 main ways. They are the equated monthly
instalment and the reducing balance method. According to the equated monthly instalment,
a fixed amount should be repaid throughout the amortization period. However, with the reducing
balance method since the interest to be paid is revised according to the market, your monthly
instalment may vary. You can choose between the two when applying for your loan. But we recommend
you consider the market interest fluctuations before confirming one. This is because most banks
don’t allow changes later on. But when you are selecting one, always consider the bank's policies,
your financial status and how much you can afford and other details that could impact your repayment.