BRICK BY BRICK

*0.5% increase in interest rates to 9.5% would raise equated monthly installment from Rs 900 to Rs 932

*Bankers feel this will constrain your borrowing ability, but won't affect demand for loans

*Floating rate for HDFC home loans will be 9.5%, while fixed rate borrowers would now to shell out 11%

*SBI hiked benchmark prime lending rates by 0.25%, but has not yet touched home loan rates

India's largest housing finance company HDFC, Punjab National Bank and Oriental Bank of Commerce raised interest rates on home loans by at least half a percentage point (0.5%) on Tuesday, while others like State bank of India and Bank of Baroda are expected to follow suit soon.

With this hike, the floating rate for home loans from HDFC will be 9.5% as against the previous 9%. The fixed rate loan borrowers would now have to shell out 11%, from 10.5% earlier.

Similarly, OBC has increased the interest rates on home loan by 0.5-1%. OBC's floating rates have increased to 9.25% and 9.75% from 8.75% for loans of less than Rs 20 lakh and above Rs 20 lakh, respectively for a repayment period up to 10 years.

Floating rates for loans with a tenure of over 10 years too have gone up from 9% to 9.5 % and 10% for loans below 20 lakh and above 20 lakh.