You think you know that, right? With Monday’s announcements that TD Canada Trust and CIBC are raising some of their fixed-term mortgage rates by as much as one-quarter of a percentage point, let’s see if you do.

Rising rates will make affording a first home much harder – so much so that you’ll pay more even if housing prices decline. Higher mortgage costs will also shrink the cash flow of families that stretched to buy a home but were getting by in a low-rate world – potentially by thousands of dollars a year. 

People looking for a home face astronomically high prices in some cities, but they benefit hugely from very low mortgage rates. What a dilemma these people face – buy now to lock in manageable borrowing costs for a while, or risk higher mortgage rates while hoping for housing prices to fall. 

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