Bringing good news for home loan seekers in the upcoming festive season, Kotak Mahindra Bank has slashed its home loan interest rate by 15 basis points, bringing it down to 6.50% p.a. — the lowest rate offering. The slashed rates will be offered on all loan amounts in both fresh and balance transfer cases. Making the announcement, the bank said that the lowered interest rate is part of their festive offer and will be applicable for the period between September 10 and November 8.
According to BloombergQuint, Kotak Mahindra Bank’s president for consumer assets, Ambuj Chandna confirmed that these lowered interest rates will be offered to loans of all sizes. He claimed that nearly 15-20 % of the bank’s home loan disbursement are happening at the lowest rates.
Kotak Mahindra Bank has been focusing on the segment of secured loan option where the default loan percentage has been far less when compared to unsecured personal loans. Home loans backed by collateral also provide a cushion for lenders.
Speaking about the bank’s approach in managing home loans, Chandana said that they will be focusing on salaried and self-employed customers to push the home loan offering. He further claimed that Kotak Mahindra has been witnessing a sharp rise in demand for its retail products like credit cards.
Bank interest loans have already witnessed a sharp cut ever since the RBI lowered the repo rates to increase liquidity in the market to counter the impact of the COVID-19 pandemic on the economy. However, this latest cut by Kotak Mahindra Bank makes their loan offering the cheapest home loanby an Indian bank. While India’s largest public lenders has home loan interest rates starting from 6.75 to 7.3 per cent p.a., its private-sector counterpart HDFC home loan interest vary from 6.75 to 8 per cent.
It’s also to be noted that home loan interest is part of the floating rate retail loans and are linked to external factors. So, any change in policy by RBI, like an increase in the repo rate, will have a direct impact on the offered interest rates and it will be reset.
Kotak Mahindra has been looking to expand its penetration across the country and claims to have a national footprint of 1612 branches and 2,591 ATMs as of June 30, 2021.
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