We’ve Been Warned: Interest Rates Will Rise

The warnings are come out rather loud and clear.  Interest rates will head up in 2010.

In reference to monetary and fiscal stimulus, Bank of Canada Governor Mark Carney warned consumers on December 17th, that they need to watch their debt levels as interest rates rise in the coming months.  “Although we expect the recovery to be gradual and protracted, these measures are working.  Ordinary times will eventually return and, with them, more normal interest rates and costs of borrowing.”  He expressed concern about consumers ability to carry their debts when rates inevitably go up.

It would appear he is not the only guy up there in Ottawa thinking about this.  Finance Minister Jim Flaherty said during CTV’s question period that he may soon impose measures that make it harder for Canadians to get a mortgage.  He said he is considering a few options to cool down the heated housing market including legislation to shorten permitted amortization periods down from the present 35 years to something less and, to increasing the minimum required down payment over the current  5% level.

Clearly, he is worried that people will not be able to manage their debt obligations WHEN interest rates rise as the recession fully subsides.

Sadly, I suspect Mr. Carney and Mr. Flaherty don’t have to worry too much.  Once July 1st and the HST kick in, things will right themselves quickly and more dramatically than they  may expect.  Yes, 2010 will be an interesting year.

Related Post
Early Mortgage Renewal May Beat Rising Interest Rates


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About Marg

is an award-winning real estate Broker who has successfully been helping people move since 1989. When it’s time for a move in or out of a bigger, smaller, better, more expensive, less expensive, newer, older, house, condo, farm, investment property, vacant lot or business, talk to Marg.

This entry was posted by Marg on Thursday, January 14th, 2010 at 5:19 am and is filed under Buying Real Estate, Market Conditions, Money Matters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Comments

  1. […] This post was mentioned on Twitter by Penny Pincher, Marg Scheben-Edey. Marg Scheben-Edey said: New blog post: We’ve Been Warned: Interest Rates Will Rise http://bit.ly/89lFyc […]

  2. […] all know that interest rates were destined to rise and the warnings have been out for some time now.  The new mortgage rules,  designed to cusion the blow of higher […]

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