An interest rate war is triggered due to high home loan demand. Since October the demand for home loans has been increasing at a fast pace. Thus every Bank is trying to introduce the lowest of all home loan interest rates due to which there is a sort of war going on among the banks as to who would offer lower interest rates? The lower the interest rates would be the more customer footfall the bank would have. Considering this the Kotak Mahindra Bank is offering home loan rates at 6.75%. This is is the second reduction the bank has made this month in relation to the home loan interest rate.
The home loan interest rate in the market has been ranging from 6.8 % to 7%. That is because according to the bank home loan is one of the safest segments that has been ever-growing since the lockdown. There are several reasons for the high demand for home loans one of them being the work from home style of the current working class scenario. Other than the work-from-home scenario there has been a reduction in the stamp duty rates the interest rates are low and there have been quite great discounts by the builders all of these factors have contributed to the high demand for home loans.
The reason that the work from the home system has got a higher shift in demand for home loans is that people are now looking for extra space to work as well. There could be a chance that even after the pandemic, the work from home style of work stays with us, and hence for this exact purpose, the people are trying to buy more homes. Other than that the government as well as the private lenders have been giving quite a good incentive over home loans.
The home loan interest rate of every bank starts from 6.75 and ends at 7% compulsorily because everyone is trying to attract potential home buyers. Other than that every middle-class person has a dream of having their own homes especially in such current times it seems like a feasible situation to buy a home at a very lower rate of interest.