Pattie Lovett Reid: Are you going to get hurt by higher rates? It doesn’t have to be that way

Households that have been assessing how much higher rates will cost them already know the short answer – it will cost them more. The question is how much more.

Don't be the last to leave the party.

You have been warned and how you respond will be up to you.

Bank of Canada Governor Tiff Macklem couldn't have been more clear - rates will be headed higher. The reference Macklem made during a press conference to a “significant shift in policy” suggests to me the days of cheap money will be gone in the not too distant future. The party may not be over but it is getting pretty darn close.

While the Bank of Canada left rates unchanged at 0.25 per cent, all bets are off come March if better news on the virus arrives before that meeting. Many believed rates would have headed higher at the Wednesday announcement and I'm certain there were Canadians contemplating the impact on their household balance sheet.

A popular question was from those in variable rate mortgages, who are on edge wondering if now is the time to lock in, especially given fixed rates have been on the rise over the past couple of months. How you respond depends on your comfort level and affordability. It is however, prudent to explore the options to determine what is right for you.

Households that have been assessing how much higher rates will cost them already know the short answer – it will cost them more. The question is how much more. You need to know your numbers and while credit tied to the bank rate will cost you more, the hope is high inflation will soon begin to subside.