A top-up home loan is an additional amount the bank adds to the borrower’s existing home loan. Top-up home loans are easily available and that too at a good interest rate. So taking a top-up loan on an existing home loan is a good option. Banks, housing finance companies and a few other financial institutions provide top-up loans that allow individuals to borrow a certain amount of money above and over their home loan. 


The top-up home loan is not available for everyone who has availed a home loan from a bank or a financial institution. Factors other than that are also taken into consideration before granting a top-up home loan. The bank checks the ability of repayment and all the past track records regarding the repayment of previous home loans.


Based on a comparison of all home loan top-up interest rates of all the banks in India, the interest rates on top-ups on home loan range from 8.65% to 11.6%. The top-up rates are closely related to the interest rate and loan tenure on the home loan that is already availed from the bank. Home loan top-ups are available to all the existing borrowers against the property that has been mortgaged to avail the home loan.


In a few banking institutions such as ICICI, individuals can apply for a top-up on their existing Home Loan and use those funds to fulfill multiple needs such as home renovation, business expansion, funding your child’s higher education, marriage expenses or any other personal needs.

Benefits of having top-up home loan:

  • Since the top-up loan is an extension of your existing Home Loan lender, they already have all of your account credentials. Hence, a top-up loan does not need a lot of documentation and is also processed more quickly than a normal Home Loan or Personal Loan. 


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  • When the existing home loan is not sufficient, the top-up loan comes in handy in times of need for extra financial support. 


  • The top-up loan taken over your Home loan can be utilized for any of your expenses like home extension, buy furniture, home renovation or fulfill personal expenses. You are not required to provide to the bank any proof of expense for the loan usage. 


  • You can get a home loan top-up that would generally cost you the same rate or a little more than your home loan. Opting for a regular personal loan may cost you anywhere between 11% and 24% per annum. Money saved is money earned, and therefore, you save a lot from the interest component of a top-up loan. 


  • Under sections 80C and Section 24 of the Income Tax Act, a top-up loan gives extra tax benefits. It is to be provided that you utilize the top-up money for home reconstruction or renovation.


  • The top-up home loans are available for a longer tenure than a personal loan, gold loan or car loan. Top-up loans are available for individuals for up to a maximum of 20 years or till the full tenure of repayment for your home loan. The tenure of a top-up loan depends on the income age, borrower’s profile and the value of the property, apart from the bank.


Home loan top-up provides individuals with great financial stability when required. An individual in need of a top-up loan needs to check all the positive and negative aspects of having it along with the existing home loan. The top-up loans, like everything else in the world, have their advantages and disadvantages. It depends on which side the balance is tilted more in the individual’s case for them to come to conclude opting for a top-up loan or not. 

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