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Kotak Mahindra Bank home loan rate drop: Home loan borrowers to get lower interest rate for next 60 days

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Kotak Mahindra Bank home loan rate drop: Home loan borrowers to get lower interest rate for next 60 days

MUMBAI: Private lender cut its interest rates on home loans to 6.5%, one of the lowest in the industry. The 15 basis points cut will be valid for the next 60 days – from 10th September to 8th November, 2021.

The limited festive period offer will be applicable across all loan amounts; and on both fresh loans and balance transfer cases.

“Home loan has been a focus area for us and we have seen significant growth in the book, with the festive season upon our focus is to grow the bank’s market share in this segment and we believe our low rate offerings will help to dramatically increase our book size,” said Ambuj Chandna, President – Consumer Assets, Kotak Mahindra Bank.

25% of the lending book for Kotak Mahindra Bank is contributed by mortgages. At the end of the June quarter, the lender’s total advances grew by 6.6% to Rs 2.17 lakh crore in which home loans and the loan against property grew by nearly 18% totalling to Rs 55,623 crore.

The lowest rate of 6.5% will be applicable to the salaried class and those with credit scores upwards of 800. Home loan borrowers can use Kotak Digi Home Loans to 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 in an end-to- end fully digital, paperless and contactless process.

For Kotak interest rates have been on a downward trajectory since October 2020 when it was 6.9% and was brought down further to 6.65% in March this year. The lender has seen significant momentum in its home loan book during this period. It has also put more focus on acquiring salaried customers and ramping balance transfers from other banks and housing finance companies.

The home loan industry is predominantly salaried class with 75% share, and self-employed forming the remaining 25%.

“Since last October our low rates have dramatically helped us to attract better quality customers because they are very price sensitive,” Kotak’s Chandna said. “With this fresh cut in rates the difference between us and our competition will widen further, as this continues to be a long term play for us.”

Chandna also brushed aside any concern over the asset quality of the home loan book.

“This (home loan) has been the best performing book across all segments, and we have tightened or relaxed any credit underwriting standards during this time,” he said.

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