Kotak Mahindra Bank Home Loan Interest Rates
Interest Rate

Starting @ 6.75%

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Processing Fee

Upto 2.00%

Loan Tenure

5-25 years

Lowest EMI Per Lakh

₹ 691 for 25 years

Prepayment Charges

Nil charges for floating rates loans

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About Kotak Mahindra Bank

Kotak Mahindra's journey into the financial markets began in 1985 with the launch of Kotak Mahindra Finance Ltd. Starting as a Bills Discounting Finance Company, Kotak Mahindra Finance Limited (KMFL) moved on to financing passenger cars, investment banking, and asset management. The year 2003 saw the conversion of KMFL into a commercial bank, a first in the Indian Banking Industry. In 2015, the ING Vysya Bank merged with Kotak Mahindra Bank to create a robust banking entity. Today, Kotak Mahindra Bank has more than 1500 branches located all over the country.

Kotak Mahindra Bank Home Loan

Kotak Mahindra offers various types of loans such as Home Loans, gold loans, education loans, personal loans, vehicle loans, and finance for consumer durables. The Home Loan is a popular product from Kotak Mahindra Bank. It offers loans for purchase or construction of houses, home renovation, and home improvement. The bank also has a Home Loan Balance Transfer facility in its Home Loan portfolio. Some of the highlights of Kotak Mahindra Bank Home Loan are quick processing and attractive rates of interest. The bank also offers facilities for prepayment and foreclosure of loans. Kotak Mahindra Bank is one of the reputed private sector banks having a sizeable presence. Hence, it is one of the member lending institutions for the Pradhan Mantri Awas Yojana (PMAY).

Kotak Mahindra Bank Home Loan Interest Rate

Kotak Mahindra Bank links its Home Loan interest rates to the Marginal Cost of Funds based Lending Rate (MCLR). The bank follows this procedure from April 01, 2016. All loans sanctioned after April 01, 2016 are linked with the MCLR of the bank. The Base Rate was the benchmark rate for loans approved before April 2016. Kotak Mahindra Bank used to follow the Benchmark Prime Lending Rate (BPLR) before the introduction of the Base Rate concept in 2010. 

Some of its Home Loans might still be in the BPLR or Base Rate regime. However, customers have the option to switch over their loans to the MCLR concept at any time by paying a nominal fee. The bank has not yet moved on to the Repo Rate Linked Lending Rate (RLLR) concept that other banks like State Bank of India have adopted. In due course, Kotak Mahindra Bank might introduce retail loan products linked to the RLLR, as well.

Kotak Mahindra Bank Home Loan Interest Rates

  • The Benchmark Prime Lending Rate (BPLR) of Kotak Mahindra Bank is 17.95%. The latest revision was on September 14, 2018.
  • With effect from September 14, 2018, the Base Rate of Kotak Mahindra is 9.20%
  • With effect from July 01, 2019, Kotak Mahindra Bank will be resetting its MCLR on the 16th day of the month in place of the 1st, as was the earlier procedure.
  • Therefore, the present MCLR is with effect from August 16, 2019. The next revision is due from September 16, 2019.
  • As on date, Kotak Mahindra Bank does not have any loan product linked to the RLLR
  • Kotak Mahindra Bank will review/publish its MCLR every month

Kotak Mahindra Bank Home Loan Interest Rates - MCLR

Tenor MCLR - w.e.f. September 16, 2019

Overnight MCLR

8.25%

One-month MCLR

8.25%

Three-month MCLR

8.40%

Six-month MCLR

8.60%

One-year MCLR

8.75%

Two-year MCLR

8.80%

Three-year MCLR

8.80%

Kotak Mahindra Bank Home Loan Interest Table

Kotak Mahindra Bank charges the floating rate of interest on Home Loans. The Home Loan interest rate links to the six-month MCLR of the bank.

Housing Loan Interest Rate - Floating rate - w.e.f August 16, 2019

Category of borrower

Rate of Interest

Effective Rate of Interest

Salaried individuals

Six-month MCLR to 6-month MCLR + 0.70%

8.60% to 9.30%

Self-employed persons

Six-month MCLR + 0.05% to 6-month MCLR + 0.80%

8.65% to 9.40%

Kotak Mahindra Bank Home Loan Interest Rate - Points to Note

  • The housing loan interest at Kotak Mahindra Bank is a floating rate. Hence, it will change with every rise and fall of the MCLR. The MCLR, in turn, links to the market-related rates like repo rate, and others. Therefore, any change in these rates can have a cascading effect on the Home Loan interest rate.
  • With a change in the interest rate, the EMI is subject to change. However, Kotak Mahindra Bank prefers to maintain the EMI constant as much as possible by increasing or decreasing the loan repayment tenure.
  • If increasing the tenure is not possible, the EMI will increase accordingly
  • Kotak Mahindra Bank links its interest rate to the six-month MCLR
  • The loan interest rate depends on the occupation of the borrower. Salaried individuals have a different interest rate structure when compared to self-employed individuals.
  • Further, the credit rating of the borrower also plays a vital role in determining the rate of interest on the individual loan. A higher credit score entails a lower margin, thereby resulting in a smaller interest range spread. The lower the credit rating, the better will be the effective rate of interest on the Home Loan.
  • Existing borrowers have the choice to switch over from their Base Rate linked Home Loans to the MCLR concept. This facility is not extendable to Home Loan borrowers who are in the fixed-rate category.
  • The Home Loan interest rates are the same for all types of Home Loans

Kotak Mahindra Bank Home Loan - Processing Fees and Prepayment Charges

Processing fees

  • For salaried applicants: Up to 10,000
  • For self-employed applicants: Up to 0.50% of the sanctioned loan amount.
  • For women applicants: 5,000 flat
  • The maximum limit is 2% of the loan amount + GST and any other statutory levies, depending upon the type of loan.
  • There is no processing fee if the Home Loan application is filed online.

Prepayment charges

  • 6% of foreclosure loan quantum if done within lock-in period of 12 months from the agreement date.
  • 5% of foreclosure loan quantum otherwise + GST and any other statutory levies

Kotak Mahindra Bank Home Loan Interest Rate - PMAY

The rates of interest for individual borrowers under PMAY are the same as that of the regular Home Loan product. Though the rate of interest is the same, the method of calculating the EMI varies. It is because of the presence of an upfront interest subsidy in the PMAY loans. The PMAY subsidy amount depends on the category to which the borrowers belong and the loan amounts they avail. Eligible applicants can apply for their Home Loan under PMAY and enjoy the benefits of subsidy up to a maximum amount of 2.67 Lakhs.

  Economically Weaker Section -EWS Low Income Group - LIG Middle Income Group-I MIG-I Middle Income Group-II MIG-II

Annual household income

Less than or equal to 3 Lakhs

3 Lakhs <= 6 Lakhs

6 Lakhs <= 12 Lakhs

12 Lakhs <= 18 Lakhs

Maximum loan amount eligible for a subsidy

6 Lakhs

6 Lakhs

9 Lakhs

12 Lakhs

Rate of subsidy

6.5%

6.5%

4%

3%

Maximum amount of subsidy

2.67 Lakhs

2.67 Lakhs

2.35 Lakhs

2.30 Lakhs

Maximum tenure for subsidy calculation

20 years

20 years

20 years

20 years

Loan sanction date

After June 17, 2015

After June 17, 2015

After January 01, 2017

After January 01, 2017

  • Applicants should satisfy all eligibility norms for grant of the subsidy
  • The Central Government is the ultimate deciding authority for release of subsidy to the borrower.
  • The subsidy is in the form of an upfront credit to the loan account
  • There is no limit on the maximum loan amount, but the maximum amount of loan eligible for a subsidy is as per the table mentioned above. Any loan over the maximum permissible amount is an unsubsidised facility.
  • The maximum tenure for subsidy calculation is 20 years, irrespective of the actual tenure exceeding 20 years.
  • The subsidy calculation is on the Net Present Value of interest @ 9%
  • As a result of the upfront subsidy available in the loan account, the principal liability of the borrower reduces. Therefore, the EMI calculation is on the reduced value of the principal loan. However, the bank charges interest at the contracted rate.

Kotak Mahindra Bank Home Loan Interest Calculation and Repayment

Kotak Mahindra Bank calculates Home Loan interest on the daily reducing balance method. Hence, the ideal mode of repayment is EMI. Kotak Mahindra Bank does not offer any other mode of repayment. The tranche EMI-based option is available in the case of partially disbursed loans. This method of repayment is beneficial from the customer's point of view, as well. Some banks offer the possibility of step-up or step-down EMI. Such methods are also advantageous to the customer.

The EMI Concept

EMI comprises of two components, the principal repayment component and the interest repayment component. In the initial stages of loan repayment, the interest portion is substantial. Hence, the repayment of the principal amount is gradual. As we cross the half-way mark, the situation reverses with more amounts going towards the principal, as compared to the interest.

Regular repayment is beneficial to the borrower. In case of a delay in the loan repayment, Kotak Mahindra Bank charges penal interest on the default portion of the loan instalment.

Kotak Mahindra Bank Home Loan - Tax Benefits

Income tax concessions are permissible on all Home Loan interest and principal repayment under Sec 24 and Sec 80C of the IT Act.

Interest Repayment - Sec 24

  • Maximum amount of tax concession per year: 2 Lakhs
  • Joint borrowers who are joint owners can claim 2 Lakhs each

Principal Repayment - Sec 80C

  • Maximum amount of tax rebate per year: 1.50 Lakhs
  • Joint borrowers can claim up to 1.50 Lakhs each provided they are joint owners of the property.

These benefits are available only up to the extent to which they repay the loan.   

Kotak Mahindra Bank Home Loan Interest - Frequently Asked Questions

How do you calculate the EMI of a Kotak Mahindra Bank Home Loan?

Kotak Mahindra Bank has a readymade EMI Calculator on its official webpage. Access the calculator and submit the necessary information such as loan amount, rate of interest, and the loan repayment tenure to get the EMI amount.

Alternatively, you can use the EMI calculator available at MyMoneyMantra. Access the webpage and click on the Financial Tools. Select the EMI calculator option and enter the necessary details to get your EMI instantly.

How do you calculate the EMI in a PMAY Home Loan?

The PMAY Home Loan EMI needs a different calculation procedure because of the upfront subsidy factor. The upfront subsidy amount is to be subtracted from the principal loan amount to arrive at the EMI. The process involves the computation of the subsidy amount. The PMAY official website has a PMAY subsidy calculator to enable borrowers to confirm their subsidy amount. Use this calculator to determine your PMAY subsidy. Deduct the subsidy amount from the principal loan amount to arrive at the net figure. Use this loan amount to calculate the EMI using the regular EMI calculator.

Is it possible to calculate the eligibility for the Kotak Mahindra Bank Home Loan?

Your Home Loan eligibility depends on your repayment capacity. Factors that affect your eligibility are your income and your monthly obligations. Kotak Mahindra Bank does not have a loan eligibility calculator on its website. However, such calculators are available on the internet where you enter your income and obligations to arrive at the probable eligibility amount.

Does my credit rating affect the Home Loan rate of interest?

Kotak Mahindra Bank Home Loan interest rate depends on several factors.  Your credit rating will decide the spread over the six-month MCLR. An excellent credit score will ensure a lower spread, whereas an average credit rating will increase the spread to the maximum extent.

Why are the Home Loan interest rates different for a salaried person and a self-employed individual?

One of the factors that decide the Home Loan interest rate is the occupation of the applicant. A salary is considered as a regular source of income, whereas income from self-employment ventures can vary from one month to the other. Therefore, the rates of interest are different.

Is it always the case that the rate of interest on the Home Loan of a salaried person is less than that of a self-employed individual?

It depends on other external factors such as the credit rating of the borrower. However, all other things remaining the same, the rate of interest for a salaried individual is less than that of a self-employed person. However, if the self-employed person has an excellent credit rating when compared to that of a salaried individual, the rate of interest can be lower than that of the salaried person.

Can I avail PMAY loans for an amount more than what is eligible for calculating the subsidy?

There are no restrictions on the loan amount under PMAY. However, there is a cap on the maximum loan eligible for a subsidy. Any loan over and above this figure is treated as an unsubsidised loan.

Does Kotak Mahindra Bank offer a fixed rate of interest on Home Loans?

As on date, Kotak Mahindra Bank does not have a fixed rate of interest Home Loan product. However, there could be some existing accounts in the BPLR and Base Rate regime with a fixed-rate structure.

What is the advantage of having a floating rate of interest for your Home Loan?

The floating rate of interest is an accurate indicator of how market rates behave. If the market rates go down, the rate of interest on your Home Loan goes down, as well. Hence, you benefit from either a reduced EMI or reduced loan repayment tenure. The vice versa is also possible if the rates go up.

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