Okay - so rates are on the way up. Nobody seems to know how much they will go up and how soon it will happen. For those folks about to buy a home, it would probably be a good idea to lock into a longer term mortgage to avoid having larger payments in the next year or two or three. After all, some of the big banks have raised their rates in the past few weeks by as much as 0.85%.

But what about those of us that have a few years remaining on the term of our mortgage? Here's something to consider:

If you have a mortgage with a year or two remaining on the term, it might be worth incurring a small penalty today in order to lock into a current rate for the next five years or longer. You will want to make sure you fully understand any and all penalties that may apply. If you decide to close out your existing mortgage and lock into a longer term mortgage, you will likely incur the greater of a three month interest penalty, or the interest rate differential, which could be much higher than the three month interest penalty. Due dilligence is key - it's recommended you contact a qualified mortgage broker to help you with your decision.