This special rate is a limited period festive season offer beginning 10th September and ending 8th November 2021
As the festive season starts this month, private lender Kotak Mahindra Bank announced that it has reduced its home loan interest rates by 15 basis points (bps) from 6.65% to 6.50% p.a starting tomorrow. This special rate of 6.50% p.a. is a limited period festive season offer beginning 10th September and ending 8th November 2021.
“Rates for both fresh home loans and balance transfers now start at 6.50% p.a., offering the best value to home buyers. This special rate is available across all loans amounts and is linked to a borrower’s credit profile," the lender said in a statement.
This is the lowest interest rate in more than a decade and one of the most competitive among rivals, its president for consumer assets, Ambuj Chandna told reporters in a virtual call.
Chandna also said, “We are delighted to add to the festive cheer for millions of home buyers and help make their dream of owning their ideal home a reality. As the world has changed and we are spending more time at home, our lifestyles have also evolved. People are looking for comfortable residences where the entire family can work, entertain and spend quality time together. Kotak’s incredible 6.50% home loan interest rate now makes owning one’s dream home even more affordable."
In the past, its rivals which include HDFC and SBI, have responded to rate cuts by slashing their own offering and it would be interesting to see how they react this time.
Demand for home loans is coming because of a greater interest in home buying triggered by the pandemic, which has caused both work and education to shift to the homes, and also a downward trend in home prices, Chandna added in the investor call.
There has been an uptrend in the balance transfers, where a home buyer already servicing a loan is shifting to the lender for a lower rate, he said, adding that such transfers are happening for loans taken from both non-bank lenders and also top-tier banks.
The bank is able to cut the interest rate despite no rate cut from the policy side because of the excess liquidity in the system, he said, making it clear that other retail segments including credit cards are also seeing good pick-up in credit.
The bank's lowest rate offering had stood at 6.9 per cent last October, and had been cut twice since then to the current rate of 6.65 per cent. Chandna said over 15 per cent or a sizeable chunk of the customers fall in the lowest rate offering category.
He said mortgages constitute over a fourth of the lender's overall book and home loans have been a focus area for the last one year. However, he declined to share any data on how the market share has increased over the last one year or also give target on how much they wish to sell during the limited period offer.
The bank has not changed its underwriting standards for home loans and continues to follow the same practices, he said.
From an asset quality perspective, Chandna said the bank's home loan book has performed very well over the last year and added that the lowest rate offering helps it get the best quality customers.
Customers can apply for home loans online. With Kotak Digi Home Loans, home loan applicants can now apply for and receive an instant in-principle sanction letter along with their loan amount eligibility, the tenure of the loan, interest rate and EMI.
Features of Kotak Home Loans:
-Starting at 6.50% p.a. on both fresh home loans and balance transfer loans
- The rates are applicable for both the salaried and self-employed customer segments
- Instant in-principle sanction with Kotak Digi Home Loans
To apply for a Kotak Home Loan online, visit Kotak Home Loans. Consumers can also apply through Kotak’s bank branches across India. Kotak Home Loans are available across over 100 cities and towns in India. Existing Kotak customers can also apply through the Kotak mobile banking app or net banking.
Kotak Mahindra Bank's shares on BSE were trading 0.074% lower at the time of publishing the story at ₹1,816.55 apiece.
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