Mortgage rates are on the rise across Canada, with the Royal Bank of Canada leading the charge. While many people may be deterred by this news, the situation is not nearly as bad as it seems for two key reasons.

“For the consumer, while it’s going to make it more difficult for them to afford a mortgage, it’s always a good idea to go back to the savings drawing board to secure a higher down payment,” said Penelope Graham, a spokeswoman for, identifying the first of those reasons.

But there is also a longer-term reason not to worry about this month’s increases in fixed rates.

“These are short-term rate fluctuations in a longer-term trend that will keep fixed interest rates low,” says Michael Smele of The Mortgage Station.

“Canadians have taken on record amounts of consumer debt; this is undeniable. However, the cause of it, government monetary intervention, will not cease.”

Smele believes that Canada’s economic recovery hinges on a particular action from the federal government.

“In order to keep the fragile global economic recovery on track, further stimulus is the only logical course of action,” he says. “This translates into further government bond buying and lower fixed interest rates.”

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