Kotak Mahindra Bank Ltd. will offer home loans at 6.5% – the lowest interest rates in years. A phase of sharply lower key interest rates, ample liquidity and the banks’ reputation for gaining a share in the relatively stable housing loan market have led to a sharp decline since 2018.
At the start of the festival offer, Kotak Mahindra Bank cut the interest rate on home loans for the holiday season by 15 basis points to 6.5%. The price is valid for the period between September 10th and November 8th.
Of course, floating rate retail loans, including home loans, are now pegged to an external benchmark. Every increase in the repo rate therefore means an adjustment in the lending rate. Changes in credit quality also lead to a reset.
The lower interest rates will apply to loans of all sizes, according to Ambuj Chandna, president of consumer wealth at Kotak Mahindra Bank. Currently, about 15-20% of the bank’s home loan disbursements are made at the lowest rates, he said.
Kotak Mahindra Bank, like most other lenders, focuses on secured personal loans, which have lower default rates compared to unsecured personal loans. Home loan collateral also provides convenience to lenders.
Home loans have become a major focus of the bank, according to Chandna. “We will focus on employed and self-employed customers to expand our home loan offering,” he said. “We’ve seen strong demand recently for all retail products, including credit cards.”
As of June 30, Kotak Mahindra Bank’s home and loan loans increased 18% year over year to Rs 55,623 billion. Across the banking sector as a whole, lending for house purchase rose 10% year over year in July.