Mumbai, Jan. 23: Home loans are likely to become more expensive with banks and financial institutions gearing up for another round of interest rate hike.

State Bank chairman A. K. Purwar said, ?There could be some upward pressure on interest rates given the current liquidity conditions in the market.?

?If this trend persists for a longer time, rates on retail loans, including home loans, would come under pressure.? he said. ?We are waiting for the monetary policy of the central bank to give us some direction regarding the interest rate movements.?

HDFC, the country?s largest housing finance company, has also declared that it will soon review its interest rates on home loans.

?We will review our interest rates within the next 6 to 7 days and there is a possibility of a rate hike of 25 to 50 basis points,? said Keki Mistry, managing director of HDFC.

Industry observers say since the liquidity pressures are of short-term in nature, there will be an upward revision in floating rate home loans, while fixed rate loans may remain the same. However, ICICI Bank, does not foresee any change in interest rate movements.

?We do not expect much change in the credit policy and do not expect any upward revision in interest rates in the near future,? said Chanda Kochhar, executive director of ICICI Bank.

?Though we have recently increased our deposit rates in keeping with the market, we have no plans to increase our lending rates. However, we will take a final call based on the directions provided by the credit policy,? she added.

?Though the liquidity has dried up in the market, we do not feel that RBI will tinker with the interest rates as inflation is under control,? said Union Bank chief Cherian Verghese.