Alberta boom will continue to bloom and the bust is nowhere in sight, according to a new report by the TD Bank on the province’s economic future. As a result of the boom, three of Canada’s major banks are raising residential mortgage rates. The Bank of Montreal (BMO) and the Royal Bank (RY) said last week that their posted rates will raise as much as a quarter point beginning on Thursday. TD Bank’s (TD) rate changes went into effect October 10th, 2007.

BMO’s five year rate will increase 0.25 percentage points to 7.44 per cent, Royal Bank’s five year closed term will rise 0.21 points to 7.4 per cent, and TD Bank’s five year increased 0.25 points to 7.44 percent.

The increases come as bond yields rise on speculation, the Bank of Canada continues to hold the line on its own benchmark rate and may even have to raise it to keep inflation within the acceptable target range.

If you are at all considering buying a home contact a mortgage broker today and reserve a rate. If you can get today's mortgage rate, and tomorrow's pricing you can minimize your monthly costs. Reserving a rate does not commit you to anything - you don't have to buy a home, you don't have to use that rate - but it does protect you from rising rates.

However, Bank of Canada governor David Dodge is keeping a close eye on the high price of housing in Western Canada as he determines whether to revise interest rates or not. During a news conference following a speech to the Vancouver Board of Trade, Dodge suggested the central banks interest-rate policy has unduly influenced new home prices.

“One worries about the structure of the mortgage market, that we may be actually facilitating a rise in the price of housing,” says Dodge.

The Bank of Canada boss will decide Oct. 16th whether to change or maintain the current overnight interest rate of 4.5 per cent in wake of the loonie reaching parity with the U.S. greenback for the first time in three decades.