5 ways to leverage your house to fund your goals

Here are the ways in which you can leverage your property to fund your goals.

1) Loan against rent receivables This loan is taken against the future rental income of a residential or commercial property.

LOAN AMOUNT: 55-85% of the receivable rent for the residual lease tenure, subject to a maximum limit, usually Rs 10 crore. TENURE: Maximum of 10 years or residual lease period, whichever is lesser. RATE: 11.75-14.5% PROCESSING FEE: 1-2% of loan amount.



2) Top-up loan This loan is taken in addition to an existing home loan.

LOAN AMOUNT: Equivalent to originally sanctioned home loan, subject to a maximum limit, which varies for banks. It can also be calculated as percentage of the market value of property, minus the outstanding home loan. TENURE: Up to 20 years; can also be linked to original home loan. RATE: 50-200 basis points more than your existing home loan rate. PROCESSING FEE: 0.35-1% of loan amount.

3) Home equity loan Such a loan allows you to borrow against the value of your residential or commercial property.

LOAN AMOUNT: 50-65% of the current property value. TENURE: Up to 15 years. RATE: 11.5-15.5% PROCESSING FEE: 0.5-1.5% of loan amount.



4) Overdraft against property This option lets you take an overdraft against your property.
LOAN AMOUNT: Up to 65% of the value of the property, subject to a maximum limit. TENURE: Up to 10 years. RATE: 12-14% PROCESSING FEE: Up to 1% of loan amount.

5) Reverse mortgage The property owner can borrow against his home equity and get regular monthly payments or a lump sum.
LOAN AMOUNT: 45-65% of the current value of the property, subject to a maximum limit. TENURE: 15-20 years RATE: 11-13% PROCESSING FEE: 0.25-0.5%