Loan against property: how much can you borrow?

By Parish Rao · 24 August 2026 · 5 minute read

A loan against property looks like the obvious way to raise money when you already own something valuable. The arithmetic is less generous than most owners assume, and the valuation is where the surprise usually lands.

How it differs from a home loan

A home loan funds the purchase of a specific property and the lender knows exactly where the money is going. A loan against property is raised against something you already own, for a purpose the lender cannot control.

That extra uncertainty shows up in three ways: a lower percentage of the property value, usually a higher interest rate, and closer attention to the valuation.

The arithmetic

Lenders advance a percentage of the assessed value, not of your asking price or your own estimate. That percentage is typically lower for a loan against property than for a home loan on the same property.

So the sequence is: the valuer decides the value, the lender applies its percentage, and the result is your ceiling. Then your income has to support the repayment, which is a separate test that can reduce the number again.

Owners frequently plan around the value and forget the second test. Both have to clear.

Why the valuation matters more here

In a purchase there is a sale price, a builder file and a fresh transaction to reference. With a loan against property there is often none of that. The property may have been in the family for decades with no recent transaction anywhere near it.

The report carries the whole file. If it is thin, the lender simply lends less.

What tends to reduce the figure

• Tenants in possession, especially on old protected tenancies.
• Unclear or incomplete title chain.
• Pending mutation, or khata questions depending on your state.
• Construction that differs from the approved plan.
• Older buildings where the assessed remaining life is short.
• Properties that are hard to sell quickly, which is what the lender is really pricing.

Two things worth knowing before you apply

Value it first. Knowing the realistic figure before you approach a lender tells you whether the plan works at all. It also stops you applying to four banks and collecting four enquiries on your credit record for a loan the property was never going to support.

Appreciation is real money. Many owners are working from a valuation that is years old. In markets that have moved, a current report can unlock a materially larger sanction or better terms on a balance transfer. One inspection tells you whether that applies to you.

The honest warning

This loan is secured against a property your family lives in or depends on. Lenders can and do act on that security. Borrow against the number the property genuinely supports, not the number you wish it supported.

Read how we prepare bank format valuations, see what the valuer checks on the visit, or call us before you apply.