Moody Analytics chief economist Mark Zandi told a Toronto audience last week that he sees the prime rate, now at 3 per cent, going as high as 7 per cent within two years.

The U.S. Federal Reserve is expected to start raising rates next June and Zandi expects us to follow suit, even though Bank of Canada governor Stephen Poloz says that’s not necessarily the case. The increases might begin sooner. Friday’s economic surprise was surging September job creation with a corresponding drop in unemployment.

in 1989 the Bank of Canada created a recession by raising interest rates to throttle inflation. That did the trick, but flattened the housing boom and the wider economy as well. In 1990, the house was worth 10 per cent less than we’d paid for it and remained underwater for five years.

They won't or else everyone who is just squeaking by on overpriced houses will have to default (which is a lot of people)

The economy is still to shaky, no way in hell rates will hit 7%

Bring it. It'd likely weed out the faux ballers.

Brb applying for 4th and 5th part time job

It would crash the market and housing prices would drop substantially.

People struggling to get by now can't pay mortgage on 700k home. Need to sell house. House now worth 575k. Upside down. Screwed.

Also even if you're fine your house value drops as well. The only one that benefits are people not yet in the housing market after the price corrections.

What do you consider "Maxing out"?

granted we pay much more for real estate vs income when compared to some parts of the USA.

but i've always wondered what people consider "maxed out"

% of your monthly income on mortgage?
what if you have no other debts?

im pretty comfortable, but i'm also looking to move and am wary because it will be stretching me further than i want to go (but still manageable, i'm just extra cautious compared to others)

But if you're borrowing less at a higher rate you still may not be better off, at least in the short term. If you've got cash, then you're all set.

is this going to happen before or after this long awaited market correction/bubble burst/crash/collapse?