(Source: CBC News)

Homebuyers could be lulled into taking on larger mortgages than they can handle because of continued record low interest rates, says the C.D. Howe Institute.

The Ottawa-based public policy think-tank says many economists, including its own, are predicting rate hikes as much as a full percentage point or more later next year. “Does the simple experience of short-term interest rates being so low, for so long, encourage people … to mortgage themselves more than they otherwise would, and buy a bigger house than they otherwise would … and get themselves into trouble longer term?” said C.D. Howe president and CEO William Robson.

Read the full article, “Interest hikes could shock mortgage holders” at CBC News (Dec 9, 2009).

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