What effect will rising interest rates have on your wallet?
Finance Minister Jim Flaherty is concerned about the impact rising interest rates will have on Canadian family budgets in 2011.
Flaherty believes that there has been a shift in how Canadians view their homes and that a return to the past might be a wise move.
Nonetheless, some homebuyers are worried they’re running out of time to lock in to an affordable interest rate in a heated housing market. Others are wondering if it's time to renegotiate if they can, or consider locking into a fixed rate loan.
Or perhaps you're a bit more worried about big financial commitments like borrowing for home renovations or motor vehicles?
But when, and over what time frame, rates will start to move is still unclear. Some firms, like Bank of Montreal, are predicting that rates in Canada could rise by three quarters of a percentage point by the end of the year. Others are forecasting a more modest jump.
Nobody, however, see rates heading down from here.
Analysts still expect the Bank of Canada to remain on the sidelines until 2nd quarter of 2011. On average, major economists now predict a two percentage point increase in the overnight rate over the next 24 months.
Their outlooks, if accurate, imply a five per cent prime rate by December 31, 2012. Prime rate is currently three per cent and the 10-year average of prime is 4.48 per cent.
Here, thanks to CanadianMortgageTrends, you'll find a summary of the latest year-end interest rate projections from each of Canada’s Big six banks.
What do rising interest rates mean to you? Will you be jumping in to get a taste of low rates before they disappear? Or is the next order of business paying off the debt you already have?
By Gordon Powers, MSN Money