Kotak Mahindra Bank wants to be a challenger in the mortgage market and keeps interest rate low
It can be noted that SBI had increased its rate offer by a strong 0.25 percent last week after the end of a limited-time offer where they were priced at 6.75 percent.
Some lenders have reportedly followed SBI’s example and have also increased their offers. Prior to the SBI’s move, HDFC had also raised the interest rate on its deposit offering.
Chandna said mortgage lending is a key focus area for Kotak Mahindra Bank due to the product’s ability to establish a closer connection with clients, from the performance of the portfolio from an asset quality perspective to the over the past two years and also some room for growth.
Asked about the cost of funds, he said that there had been no external movement like a hike in the key rate by the RBI which should lead to a hike and also pointed out that the share of low cost deposits on current and savings accounts is highest for the Bank.
He parried a question about the impact of the move on the net interest margin.
It can be noted that real estate demand had received a boost due to a reduction in tariffs by states like Maharashtra until March 31. However, the impact of the end of this program is not yet visible.
In a statement, the bank said the low 6.65% interest rate will depend on the loan-to-value ratio in a proposal as well as the borrower’s credit rating.
The interest rate applies to both home loans and balance transfer loans for all loan amounts, he said, adding that the bank offers attractive rates for employees and the self-employed.