By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-23 10:34

China raised one-year loan interest rates by 27 basis points to 6.84 percent respectively as of July 21. It is the 7^th time since 2004 for the bank to raise the interest rate, aiming to cool inflation and investment.

Amid skyrocketing housing prices and higher interest rates, what will the life be for those Chinese with or without a home?  

In the country, the average interest rate on a 5-year, fixed-rate loan is now 7.38 percent, up from 5.04 percent three years ago. That means someone who borrows 720,000 yuan (US$95.106) for a mid-sized apartment would have monthly payments of 5,747.56 yuan, instead of 4,767.61 yuan three years ago.  

Special coverage: Housing in China  Related readings:  Beijing housing prices up 10.1% in 1st half  Tax only raises cost of housing  Shanghai imposes land tax on second-hand housing  Housing prices far exceed citizens' expectations

Rising interest rates are making it even harder to afford homes and putting the brakes on the nation's heated housing market. 

“Of course, I am not happy about constant interest rate hikes,” said Yuan Hui, whose family loaned 200,000 yuan, and the monthly payment is 2,000 yuan for 20 years. “I will try to remove the debt as soon as possible.”  

“I can not bear it. The CPI is increasing while the salary remains constant, so how we can live better lives?” said an anonymous buyer.  

“We are hoping to increase rates before buying houses, but afraid after purchasing. Most of the monthly payments are the interest, and it is tough working for the bank,” said an anonymous chat room user.   

However, people who not own houses are still apathetic towards the hike. 

A recent survey by the website www.szjzcy.com showed that 685, or 54.17 percent of the 1,266 respondents, said they would not purchase property now, while 373 or 29.46 percent indicated they still want to buy.  

“The apartment buyers who pour millions of yuan would not care about extra money resulting from interest rate hikes,” said Hao Zhou. He worked for less than three months in a network company, and has no plans to buy a house.

Hao’s opinion is supported by Rong Xiandong, one of his colleagues, but Rong also said people will buy houses if they have enough money, regardless of prices.

Property prices in China's 70 large- and medium-sized cities jumped by 6.4 percent year-on-year in May, faster than the 5.4 percent growth in April, despite government efforts to rein in the overheated sector.  

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