Ahhh, the long seemingly endless winter has finally ceased its hold on the Canadian prairies and has opened the way for the spring thaw.

With spring comes a couple of things, the beginning of the driving season thus higher fuel prices, and the rise of Canadian mortgage interest rates.

You’ve obviously noticed that the mercury has risen the past week, and if you own a vehicle, you’ve likely noticed the increase at the pumps. The rise of the price of fuel usually doesn’t come in until the May long weekend, when Canadians begin their vacation time with the family and start heading to their summer cabins and lake cottages. This year though it has started early and it has to do with the same reason that it rises every spring, demand. This year’s demand though is culminated early by a demand that was created overseas, and you can pinpoint it at Libya.

Now I’m not an oil and gas trader, but I am in the Alberta mortgage industry. Canadian mortgage interest rates started the year extremely low, and everyone forecasted much higher rates, and even though we are only just past the first quarter we’ve seen some interesting movements.

Five-year fixed interest rates are Canadians’ mortgage of choice, so I’ll depict its activities and note that the one to four year terms have similar changes.

In 2011, we’ve already seen mortgage interest rates fluctuate between 3.69% and 4.49%.

We started the year off at the 3.69% level, and then it shot up to 4.29% in February. Canadian and Alberta mortgage interest rates trickled back down to the 3.84% level in mid March due to global catastrophes and uncertainty in the Middle East.

But those rates were very short lived and once the markets understood the level of the problems abroad, interest rates rebounded to their current level of 4.14% to 4.49%.

According to CMHC, in 2011 we’ve already seen an increase in home re-sales and new home starts, and CMHC’s forecasts are positive for the remainder of the year. Alberta mortgage consumers are to create about a 1-3% increase in the housing market over 2010, which isn’t huge, but we aren’t looking for massive gains, we are looking for normalcy.

CMHC also states that we are still in a buyers’ market as interest rates are still very low compared to historical standards, and once Canadian mortgage interest rates move higher, we’ll return to a balanced housing market, which is great news for those in the ‘move up’ market as the first time buyer will be snapping up their homes.

The Canadian economy is currently firing on all cylinders right now, and there’s a lot of positive news for Canadians and Albertans to be excited about. Even if interest rise a little bit more, they probably still won’t hit the 20-year average of 5.85%, meaning housing will feel a lot of positive effects this year.

But there’s one variable that controls the market more than we’d like to think about, and that’s fuel prices. If fuel prices rise as high as they did a few years ago, then we will see some larger gains here in Alberta for the short term but if the prices stay high for a longer period of time we might see all of these gains derailed.

Jean-Guy Turcotte is an Accredited Mortgage Professional at Dominion Lending Centre’s-Regional Mortgage Group and can be contacted for appointments at 403-343-1125, texted to 403-391-2552 or emailed to jturcotte@regionalmortgage.ca.