The chiefs of two financial institutions that offer relatively low interest rates for auto and mortgage loans said yesterday that they expect to benefit from the practice, despite some risks.

"We're essentially gambling that we're going to see short-term rates relatively stable over the next few years," said C. Jackson Ritchie Jr., president of First American Bank of Washington.

First American charges borrowers who have accounts at the bank a fixed rate of 11 percent for new-car loans of 36 to 48 months, lower than the 11.9 percent rates charged by automobile finance companies and substantially lower than most bank charges, which are now approximately 13 percent. The bank has been receiving about 100 auto loan applications a day, Ritchie said.

Ritchie told the House Banking economic stabilization subcommittee yesterday that the bank makes a small profit and covers its overhead at that rate. "Our approximate cost of money is 8 1/2 percent," he said.

That profit could be wiped out if the bank's cost of money increases, and the bank will end the program if rates rise too high, Ritchie said. For right now, though, the bank is enthusiastic about the program because of "our feeling that it will help us grow for tomorrow by broadening our overall client base," he said.

Paul A. Willax, president and chief executive officer of Empire of America Federal Savings Association, said that his company chose to offer assumable variable-rate mortgages of 9 3/4 percent in part because "our management felt that offering something at a lesser price and selling it was preferable to offering something at a substantially higher price and not selling it at all.

The savings association has headquarters in Buffalo and branches in Michigan, Florida and Texas. It has taken in more than $100 million in mortgage applications in less than two weeks since it set aside $500 million to offer at the 9 3/4 percent rate.

The mortgages have maturities of 10 to 30 years and an interest rate indexed to the one-year Treasury Security Index. The rate will be adjusted up or down annually as the index moves up or down, with a limitation of 2 percentage points on how far it may move in any one year. In addition, the bank charges 2 points as a fee when the mortgage is originated.

Willax said that the bank set the rate below 10 percent to "break the double-digit interest-rate barrier" and to attract borrowers to variable-rate loans, which borrowers generally are predisposed against.

Subcommittee Chairman John J. LaFalce (D-N.Y.) said yesterday that he questions "the potential for a consumer-led recovery when interest rates remain at historic highs in relation to the rates set for other types of loans in the marketplace."

"How is it possible to have a consumer-led recovery without addressing the underlying problems of high-cost credit?" he asked.

Ritchie said he believes that other banks in the Washington area are contemplating lowering rates to attract borrowers. "If many of our colleagues find themselves in the position to follow our lead, and if our assumption about the pent-up demand for large durables is correct, I can foresee a stronger, consumer-led recovery in the months ahead," he said.