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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.

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Marg Scheben-Edey is a Broker with RE/MAX four seasons realty limited, Brokerage in beautiful Collingwood, ON. With three decades of experience, Marg is a leader in the local real estate marketplace and is ready to help guide both Buyers and Sellers in achieving their real estate goals. Email Marg

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Marg Scheben-Edey

Real Estate Broker
Market Value Appraiser - Residential
Accredited Green Broker™
(designated by the National Association of Green Agents & Brokers)

RE/MAX four seasons
realty limited, Brokerage
Each Office Independently Owned & Operated
67 First Street, Collingwood L9Y 1A2

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