Navin Jaiswal, a senior executive in a private company, had taken a loan of Rs 20 lakh with 8% floating interest rate and started paying EMI of Rs 19,000 per month two year ago. But now when the interest rates are closing near 11%, his EMI has gone up to Rs 22,000.

Thus the inflation has ruined the budget planning of his home and Jaiswal is apprehending worst days as home loan interest rate might go up.

"Whenever the inflation gets out of control, the Reserve Bank of India (RBI) is supposed to pump out the liquidity from the market by increasing the bank interest rate," YB Verma, a retired assistant general manager of SBI, said. "Today the prime landing rate (PLR) of RBI is floating between 12.75% and 13.25%.

There is a strong possibility that RBI will soon raise the PLR which will push the home loan rates up, he said.

Rising home loan interest rates have affected the real estate industry. The property prices in Jaipur are stable for the past one-year. Many of the major projects in the city have not got buyers during this period. "If the home loan interest rates continue to increase, then it will drive the investors out of the real estate market," Atma Ram Gupta, a top builder, said.

Due to increased price of steel and cement, the construction cost has gone up by almost 30% and now if the home loan interest rates go up, there will be serious threats to the real estate industry, he said.

Although he declined to comment on whether the property market in Jaipur was facing a downturn, but he accepted that there was urgent need of steps which could revitalise the real estate market in the city.