Mortgage rate hike could cool housing rebound.

For the first time since Jason Pilon began selling houses two years ago, he's fielding questions from anxious clients about rising mortgage rates.

The Ottawa-based real estate agent has sold nearly 100 properties this year as historically low rates fuelled a buying frenzy in the city, with house-hunters rushing to take advantage of easy money. The same trend has played out across many parts of Canada over the past few months, but higher rates set this week by the country's biggest banks may soon cool a hot market – and do a favour for Bank of Canada Governor Mark Carney.

The central bank has said it expects to keep its key short-term lending rate locked at 0.25 per cent until mid-2010 to spur an economic recovery. Chartered banks, however, are finding their borrowing costs increasing for longer-term money, as investors bet that improving economic conditions will eventually bring more inflation.

By raising their mortgage rates and making it more expensive for customers to borrow money for a home, the banks are effectively throwing some cold water on residential real estate. That, in turn, might allow the Bank of Canada to keep its short-term rate unchanged as pledged. >> fulll story

Steve Ladurantaye - From Thursday's Globe and Mail

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[Wotouffsold]

Its all in the manual they make you read before they download your being into those tiny bodies in those dark wombs.