Owen Blogs about how Ottawa is warning that Canadians may be taking on more debt than they can handle. Last week our Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty warned that Canadians need to be careful with these record low mortgage rates that are being offered. They feel that many people are taking on too much debt. This was brought about when The Bank of Montreal introduced a 5 year fixed rate mortgage at 2.99%. Since then most of the other major banks have matched this record low rate. I have to agree with Mr. Carney and Mr. Flaherty on this one. I have been advising my clients to expect higher interest rates in the future and to prepare for those higher rates now. Don't get me wrong, these record low rates are a fantastic offer and it's currently a great time to be a buyer of real estate. Especially if you're a first time buyer and can buy a 1 bedroom condo for about the same as you're paying for rent right now. Just keep in mind that interest rates have no where to go from here but up and that you should plan on having your mortgage payments increase sometime over the life of your mortgage. So, for that reason, maybe leave a little money on the table. Just because the bank is willing to lend you $500,000 doesn't mean you have to take all of it. Remember that's a 25 year mortgage. Sure, your payments are locked in for the first 5 years but who knows where interest rates will be after that? Personally I advise my clients to be conservative and plan ahead for a possible increase in your interest rate down the road. By all means try and take advantage of these rates...I sure am. Just don't get greedy, perhaps buy something slightly below what your maximum mortgage approval comes in at. Or start a small side fund where you are setting aside some extra money each month for when those rates eventually do go up.