Interest rates on home loans are likely to go up after the festival season. Major players are set to hike their rates by 25-50 basis points for both floating- and fixed-rate loans after the Reserve Bank of India increased the risk weight on such assets.
The new prudential norms are expected to check the quality of assets and also slow the pace of lending. Bankers are also apprehending an asset bubble.
However, ICICI Bank, the fastest growing player in the home loan market, says it will not slow its pace and is yet to decide on rates.
ICICI Bank offers fixed-rate loans of up to 20 years at 7.75 per cent.
