The mortgage offerings come against a backdrop of uncertainty over interest rates. Banks are using these products to deploy excess funds, with margin protection also part of the strategy. The focus is on home loans that hold the interest rate steady for a limited period rather than keeping it fixed throughout.

Under the semi-fixed structure described in the report, borrowers get a fixed rate for an initial period, followed by a switch. The report does not specify how long that initial period lasts or explain the rate arrangement that follows. It also does not give the interest rates offered by either lender.

HSBC and Kotak Mahindra Bank are identified as leading this approach. However, the report provides no figures on loan disbursements, customer demand or the amount of surplus liquidity being deployed through these products. It therefore does not establish the scale of the business so far.

The key distinction for customers is the limited duration of the fixed-rate feature. The report describes a product with a later change, not a mortgage whose interest rate is guaranteed to remain unchanged for its entire tenure.