Buying a home is a major financial commitment, and rising interest rates can make EMIs more difficult to manage.
To give borrowers more certainty, Kotak Mahindra Bank has launched a new hybrid home loan scheme.
Under this scheme, borrowers can keep their home loan interest rate fixed for up to 65 months.
This means their EMI will remain unchanged during the selected fixed-rate period, even if the RBI changes the repo rate.
Choose a Fixed Rate for 39, 52 or 65 Months
Customers can choose how long they want their home loan rate to remain fixed.
The bank is offering three options:
39 months
52 months
65 months
During the selected period, both the interest rate and EMI will remain unchanged.
This could provide borrowers with greater financial stability, especially during the early years of home ownership when they may also have other expenses such as furniture, children’s education, savings and household costs.
What Happens After the Fixed Period?
Once the selected fixed-rate period ends, the home loan will automatically move to a floating interest rate.
The floating rate will be linked to the RBI repo rate, along with an additional margin or spread decided when the loan is sanctioned.
The bank is currently offering home loans at an initial interest rate of 7.6%.
Borrowers Could Save Up to ₹3.46 Lakh
According to Kotak Mahindra Bank, the scheme could help borrowers save money if home loan interest rates rise significantly.
For example, on a ₹1 crore home loan, the bank said borrowers could save up to ₹3.46 lakh if interest rates increase to recent high levels.
The hybrid loan is designed to give borrowers a predictable EMI during the initial years while allowing the loan to move to a floating-rate structure later.