Kotak Bank Launches Hybrid Home Loan

Kotak Mahindra Bank has launched a Hybrid Home Loan that allows borrowers to lock their interest rate for 39, 52 or 65 months, providing protection against increases in the Reserve Bank of India’s repo rate during the selected fixed-rate period.

Under the new structure, both the interest rate and EMI remain unchanged during the chosen fixed period, even if the repo rate rises. Once the fixed period ends, the loan automatically shifts to a floating-rate structure linked to the prevailing repo rate plus a predefined spread disclosed at the time of sanction.

The product is available for both Home Loans and Loans Against Property and is priced comparably with Kotak’s floating-rate home loans. The bank said customers will not have to pay a separate premium merely for selecting the hybrid structure.

Kotak’s current home loan rates start at around 7.60% per annum, subject to borrower profile and applicable terms.

The bank said the product is intended to provide borrowers with greater certainty during the initial years of home ownership, when families may also be managing expenditure on interiors, education, household expenses and savings.

Nakul Saxena, Head – Mortgages, Kotak Mahindra Bank, said a home loan can extend across several interest-rate cycles. Locking the rate for up to 65 months can therefore provide borrowers with a defined period during which changes in interest rates do not disrupt their household budgets.

Kotak has also provided an illustration of the potential benefit if interest rates rise. For a ₹1 crore home loan with a 25-year tenure, assuming a starting interest rate of 7.60%, a 65-month fixed period and a cumulative 125-basis-point increase in the repo rate from 5.25% to 6.50%, the bank estimates potential savings of around ₹3.46 lakh under the hybrid structure.

In the illustration, the EMI on a ₹1 crore floating-rate loan starts at approximately ₹74,550 and could rise to more than ₹82,450 by month 65 under the assumed increase in rates. Under the hybrid structure, the EMI would remain around ₹74,550 during that fixed period.

Similarly, for a ₹75 lakh loan, the illustrative floating EMI could increase from around ₹55,900 to over ₹61,800, while the hybrid EMI remains unchanged during the fixed period, producing estimated total savings of more than ₹2.59 lakh. Actual savings will depend on future interest-rate movements and individual loan terms.

The Hybrid Home Loan is available across India to eligible salaried as well as self-employed borrowers.

The launch comes as Kotak continues to expand its mortgage portfolio. The bank’s mortgage book reached approximately ₹1,50,903 crore as of June 30, 2026, representing growth of around 15% from ₹1,31,792 crore a year earlier.

The product adds another option for borrowers seeking a balance between the predictability of a fixed-rate loan and the flexibility of a floating-rate structure. Its attractiveness, however, will depend on the direction of future interest rates: borrowers receive protection if rates rise during the fixed period but may not immediately benefit if market rates decline.