“Stay with fixed home loan rates”

There is a marked upward pressure on rates. Against this background, do you see any rise in deposit rates in the coming month?
Yes, the deposit rates are also likely to increase in the future. A number of banks have already increased the deposit rates marginally.

Is there any possibility of general lending rates also going up following this trend, if so to what extend is the lending rates expected to go up? Is the hike in home loan rates indicative of an impending hike in personal loans, car loans and loan against property rates also? If so, then by how much?
The general lending rates in the economy have already firmed up in the last six months. Ten-year government securities rates have gone up from around 5.25 per cent to 6.75 per cent points in the last six months. The spreads on the personal and car loans were relatively high as compared to home loans and therefore the pressure to increase the rates would be relatively less. However, if the increase in the interest rates is substantial, the rates are likely to increase on other products as well.

What are the factors influencing the hike in interest rates? Are these long-term factors or short-term changes in the economy?
The general interest rates in the economy are going up primarily on account of inflation fuelled by substantial increase in global oil prices. Also for most of the players, the spreads in housing finance activity had become too low to take care of the credit quality of the portfolio. Further, as mentioned by the Governor of RBI in the current credit policy, there are concerns over the asset bubble forming in real estate markets and the credit quality of the home loan portfolio of banks. Therefore Reserve Bank has taken certain measures which would lead to an increase in the interest rates.