1. Build your Credit Score
2. Reduce your Current Borrowing / EMI Costs
Kotak Mahindra Bank is one of the prevalent banking institutions in the finance industry. The bank helps its customers in buying their dream home by offering them several home loan options. The interest rate of Kotak Mahindra Bank Home Loan starts from 8.90% with zero processing fee if applied online.
Kotak Offers Lowest Home Loan Rates in 2021
Kotak bank has slashed the interest rates for its home loans to 6.65% across all loan accounts - making it the lowest in the market. However, it is to be noted that this rate is made available only for customers with a good credit score and Loan to Value (LTV) ratio as deemed by the bank, and can be availed only in the month of March. The move is seen as an effort from Kotak Bank to rope in as many Home Loan customers as possible before the close of the Financial year.
Lower EMI'S: Due to the lower rate of interest, the loans are offered with lower EMIs.
Loan Amount: The applicant can apply for a home loan amounting up to 90% of the property value. However, he/she can borrow only up to 80% of the value of the property if the loan lies between Rs.20 lakhs-75 lakhs and up to 75% for loans above Rs.75 Lakhs. For buying commercial property, or loans against existing properties, the applicant can only avail up to 60% of the property value.
Tenure: Maximum loan period in Kotak Home Loan is 20 years. However, the mandate may vary depending on the business profile of the applicant.
Simple Documentation: Kotak home loans are disbursed instantly with the simple documentation process.
Kotak Bank provides fast approval on loans.
Doorstep Facility: The bank appoints a dedicated executive for collecting documents from home and completing other formalities.
The loan can be applied either jointly or solely by the individuals in Kotak Mahindra Bank.
The bank also gives the provision of extending one's eligibility by adding a co-applicant whose income is the primary factor. The co-applicants can be parents, spouse, or even children above the age of 18 years of the principal applicant.
The bank generally keeps the property as collateral until the maturity of the loan period. However, in some instances, the applicant can also provide some additional securities.
The bank also offers a free personal accident insurance cover up to Rs. 1 crore along with the home loan.
Pre-approval facility: Under this facility, an applicant can apply for a loan based on his current income, assets, and employment information even before purchasing a new property. This facility is provided to the customers to enable them to close a deal as they come across a suitable property. However, these sanctions are only valid for six months.
Kotak Bank doesn't provide home loans on a fixed rate of interest. The home loan rate of interest is charged on a floating basis depending on the tenure of the loan and the amount of credit borrowed. Moreover, the bank does not follow a standard principle on the interest rate context. The interest rates are determined based on the analysis of the home loan application submitted with the bank. However, there is a maximum cap to the interest rate charged by the bank based on various factors, and the following table throws light on that.
Loan Amount |
Primary Applicant |
Interest Rates |
|
Salaried/Self-employed Professional |
Self-employed Non-Professional |
||
>or= 30 lakhs |
Women |
8.90% |
8.90% |
Others |
8.95% |
9.10% |
|
30.01 lakhs to 75 lakhs |
Women |
8.95% |
8.95% |
Others |
9.10% |
9.25% |
|
75.01 lakhs and above |
Women |
9.05-9.55% |
9.05-9.55% |
Others |
9.15-9.55% |
9.3-9.55% |
Home Loan Provider |
Home Loan Interest Rates |
Processing Fees |
Prepayment Charges |
Yes Bank |
9.85% |
0.5% of loan amt. or Rs.10,000 whichever is higher (+GST) |
NIL for floating rate loans |
SBI |
8.55% |
Rs. 0 – 10,000 |
NIL |
HDFC Bank |
8.65% |
Up to 0.5% of loan amt |
NIL |
ICICI Bank |
8.80% |
0.5% – 1.00% of loan amt. |
NIL |
PNB Housing Finance |
9.10% |
Up to 1% of loan amt |
NIL |
Axis Bank |
8.90% |
Up to 1% of loan amt |
NIL |
IDBI Bank |
8.75% |
0.5% of the loan amount |
NIL |
Punjab National Bank |
9.05% |
Nil |
NIL |
Canara Bank |
8.70% |
Varies based on applicant profile |
NIL |
Bank of Baroda |
8.70% - 9.70% |
0.25-0.50% |
Nil for floating rate loans |
Kotak Bank |
8.90% - 8.75% |
Maximum 2% of the loan amount + GST( it varies as per the loan amount) |
6% of the foreclosure loan amount within one year and 5% plus GST otherwise. |
IndusInd Bank |
9.50% |
Up to 2% |
NIL |
RBL Bank |
10.45-11.80% |
Rs. 5000-15000 |
Nil for floating rate loans |
Andhra Bank |
8.75% |
0.5% of the loan amount |
NIL |
The Flexi home loan is a product offered by Kotak bank. This product is specially tailored to protect home loan borrowers from the inconsistency of the interest rate scenario. The loans issued at fixed interest rate are generally expensive owing to various charges, while loans issued at a floating rate of interest remains highly volatile due to the sudden changes in the market rate. Kotak Flexi Home Loan abates the customer from volatility, i.e., the customer is not required to pay more with a sudden increase in the market interest rate.
Under the Kotak home loan scheme, the interest remains fixed for the first three years, and it is re-fixed again for the next three years based upon the current index rate. This process is continued until the home loan tenure ends. This loan provides a certainty of a fixed rate method to the customer, along with the benefit of a floating interest rate, thus preventing the customer from paying higher interests in case of a sudden increase in the prevailing interest rates.
Kotak FD linked home loan is a fantastic product offered by the bank, where the interest rate on loan is charged according to the one-year Retail Deposit Rate (RDR) of Kotak Bank in place of the Retail Prime Lending Rate (RPLR). It means that the interest rate on loan will change only if the one-year retail deposit rate varies. It is not mandatory for the customer to have a fixed deposit account with the bank to avail of this facility. It is available in both Kotak Flexi Home Loan as well as Floating Rate Home Loans.
KMB Home Loan is provided for renovation which may include decoration, tiling, furnishing, making changes to the appearance, construction, waterproofing and all other activities undertaken towards the improvement of the existing house owned by the borrower.
This loan enables an individual to transfer the existing home loan from other financial institution to Kotak Mahindra Bank at a lower interest rate.
Kotak bank also offers home loans to NRIs wishing to purchase a house in India or wishing to make extensions or renovations of the existing property owned by them. However, a specific eligibility criterion has been laid down by the bank for the individuals applying for this type of loan.
The bank releases the loan amount once all the documentation and legal formalities of the property is complete and it gets proof of the down payment made by the borrower towards the purchase of the property.
The bank sanctions the loan amount depending upon the funds' requirement of the applicant and the progress of construction. The bank can either pay the entire amount at one time or in the form of suitable installments. The disbursement method depends on the discretion of the bank.
When it comes to applying for Kotak Mahindra Bank Home Loan, the customer gets two options. Either the customer can go to the website or visit the nearest branch of Kotak Bank. In either of the options, the applicant needs to fill in personal, residential, income, and property details.
After filling the form, the applicant should submit it to the bank to process the application of a home loan. The bank will approve a loan only after the authentication of details during the investigation process, which involves an executive visit to the office and residence of the applicant.
If the investigation remains positive, the bank will then send the executive to visit the property that the applicant is looking to buy. After evaluating the condition of the property and its current market value, the executive will prepare a legal & technical report, which would become a factor in determining the valuation of the property.
Depending on the repayment ability of the applicant, the bank will finance up to 90% of the property valuation.
The application form with duly signed self-attested copies.
Last three months' bank statement or latest ITR or Form-16.
Latest salary slips.
Form 16 for salaried people.
Two passport size photos.
A cheque for the loan processing fee.
Proof of educational qualifications: The applicant also needs to submit his/her highest educational degree.
Identity proof: Passport/ Voter ID card/ Driving License - Any of these documents can be used as a valid identity proof because all these documents have a photo of the applicant along with the applicant’s name proving the identity of the applicant. It is required in case of both self-employed as well as salaried professionals.
Address Proof: Ration Card/Electricity or Telephone Bill/ Rental Agreement/Passport.
The applicant can submit any one of these documents which show the correct address during the verification process of the bank. However, the proofs shouldn't be older than three months.
Age Proof: Class 10th certificate or birth certificate can be used as age proof. These documents show the exact age of the applicant, helping the bank to confirm the age of an applicant.
Bank statement: This document verifies the applicant's income status depicting the creditworthiness of the person.
Signature proof: PAN/Driving License/Passport/Bank account statements. Any of these documents can be submitted at the bank. However, the signature of the applicant in the provided document should be clear and understandable. The applicant needs to maintain the same sign throughout the entire loan tenure.
Credit Score: Your credit behavior and track record from your past lenders and credit card providers get captured in your credit score. Kotak Bank needs a minimum credit score of 700 for you to be eligible for a home loan.
An applicant must be a minimum of 21 years to apply for a loan.
The maximum age limit for availing the home loan is 65 years.
A salaried/self-employed professional with a regular income can apply for the Kotak Home Loan.
Decent credit score.
However, a non-salaried professional who earns over the minimum income required is also eligible for the Kotak Mahindra Limited Home Loan.
The bank decides the amount that an applicant can borrow, based on his/her repayment capacity. The repayment capacity is determined based on the income, age, educational qualifications, number of dependents, spouse's income, assets, liabilities, savings history, occupation, business profile, the running time of the existing business and the net take-home salary of the borrower.
The bank will not finance the cost of the entire property. The maximum home loan eligibility depends on the value of the property, as shown below:
Property Value LTV
Less than 30 lakh 90%
Between 30 lakh to 75 lakh 80%
Above 75 lakh 75%
Net Income: The net monthly income (take-home salary after all deductions such as PF, ESI, gratuity) helps in deciding your home loan servicing capacity. It determines the amount of home loan EMI that you are capable of paying after meeting regular expenses based on your standard of living.
or instance, if your salary is Rs. 25,000 and the value of the house you are buying is Rs. 40 lakh, then at an interest rate of 8.90% offered by Kotak Bank, you will become eligible for (assuming you have no other EMIs to pay) getting a loan of Rs. 25.77 lakh to Rs. 36.38 lakh depending on your age.
Similarly, if your salary is Rs. 75,000, you may become eligible for a loan amount of Rs. 51.53 lakh - Rs. 72.76 lakh at the same rate depending on your age at the time of loan application.
You may also consider repaying any loans with short tenure and high EMIs to increase the eligibility of your home loan.
Nature of Employment: The bank will check whether you are a salaried or self-employed individual, company, and sector in which you are working. The bank also looks at the years of experience that you have to check your job and income stability.
The bank levies certain types of fees on all loans that it issues. Here is the list of all the charges:
Loan processing fees: Nil if applied online. These charges are levied up to 1.25% of the loan amount plus applicable taxes if the customer applies offline.
Documentation fees: The bank levies a documentation charge at 0.5% of the loan amount.
Stamping fees: The bank levies this charge as per the respective state's Stamp Act.
Credit administration fees: NIL
Credit appraisal fees: NIL
Commitment fees: The bank levies a commitment charge of 2% on the loan amount minus the disbursed.
Overdue interest: The borrower must make sure that the EMI's are paid on time; otherwise, the bank will levy a late fee of 2% on the EMI, calculated from the due date to the actual date of payment.
Prepayment/foreclosure fees: Prepayment is a facility provided by the bank in which the customer can repay the entire loan amount before the completion of tenure. However, there are certain things that the customer needs to keep in mind before choosing this option.
n case the applicant applies for a loan under a floating rate of interest, the bank allows the foreclosure of the credit without levying any prepayment fees. However, for a home loan under a floating rate of interest, the bank doesn't allow prepayment before six months starting from the date of the first EMI. It means a minimum of 6 EMI's has to be paid by the applicant before applying for a home loan foreclosure.
Solvency certificate: Kotak Bank also issues a solvency certificate if required by the customer. The bank charges Rs. 10000 for its issuance.
Credit score report: The bank also provides a credit information report if required by the customer at a minimal charge of Rs. 50.
Amortization Schedule: In case the applicant wants to get a detailed statement of his account displaying the loan transactions in chronological order, the customer can do so by paying Rs. 250. However, such an amortization schedule is issued one per year without any fees.
APAC Re-schedule: The bank provides this service at an interest rate of 1% on the principal outstanding amount.
Part foreclosure charges: The bank allows for part prepayment of the loan. However, a minimum 6 months gap should be kept between the part payment date and the first EMI. The bank permits a free part payment in a case if the applicant wants to pay off his/her loan amounting to 25% of the outstanding amount.
owever, if the borrower chooses to exceed the above-said limit, then the bank levies an interest of 4% on the excess amount, i.e., on the amount remaining after deduction of the applicable part prepayment amount. However, in the case of individual borrowers availing loan under a floating rate of interest, the bank doesn't levy any charge.
Re-booking of loans: In case of a change in property/assets/collaterals on which credit was borrowed, the existing loan should be re-booked. The bank offers this facility at an interest of 0.5% on the outstanding loan amount or Rs. 10,000/event of property, whichever remains higher.
Change in the installment due date: The bank also facilitates changes in the EMI date. The charges for this service stands at Rs. 5000 plus broken period interest if any or 0.5% of the outstanding loan amount plus broken period interest, whichever remains lower.
Calculating the EMI on the home loan has been made easier with an EMI calculator present on the web portal of banks. You can also calculate Home Loan EMIs easily on mymoneykarma website by providing the details of your loan and the repayment tenure.
Amount of Loan 10 year loan 15 year loan 20 year loan
Rs. 20 Lakh Rs. 25,012 Rs. 19,930 Rs. 17,610
Rs. 30 Lakh Rs. 37,517 Rs. 29,895 Rs. 26,416Rs. 50 Lakh Rs. 62,529 Rs. 49,825 Rs. 44,026
Kotak Bank has cut its Marginal Cost of Funds Based Lending Rate (MCLR) by five basis points across all tenors for April. The move is supposed to make housing loans, auto loans, and mortgage loans cheaper. Currently, the MCLR stands at 8.30% as compared to 8.35% (previous) while for two and three years, the rate has been revised to 9.00% from 9.05% respectively. The revised prices were effective from April 1, 2019.
Why should I choose a balance transfer to Kotak Bank?
Kotak Bank offers competitive home loan rates at a low-interest rate of 8.90% for a maximum tenure of 20 years.
What is the maximum loan mandate that I can opt under Kotak Bank home loan?
Kotak Bank offers you a longer tenure of 20 years to repay your loan with the benefit of paying low EMI every month.