Everybody knows that interest rates are going up, but the big question is how soon and how fast?  Recently two banks chimed in with two different forecasts:

CIBC: Interest rates unlikely to soar

Canadian interest rates will probably begin rising from July but are unlikely to soar as significant uncertainties remain in global economies, a new report by CIBC World Markets found.

Interest rates are likely to remain low by historical standards at no more than 2.5% at least until the end of 2011, CIBC Chief Economist Avery Shenfeld in the report.

Scotia: Interest rates seen rising

The Bank of Canada is set to embark on a series of interest rate hikes, starting in June, that will see its benchmark rate climb from its historic low of 0.25 per cent to three per cent in little over a year, Bank of Nova Scotia’s chief economist said yesterday in his latest outlook.

Warren Jestin said the move away from short-term “emergency level” rates is necessary because of inflationary pressure that is expected to emerge from stronger-than-expected growth. By the end of next year, the central bank’s target rate should be 50 basis points higher than the comparable rate set by the powerful U.S. Federal Reserve, he said in his latest update to Scotiabank’s economic forecast.

The increase of 275 basis points, to three per cent by the end of the third quarter of 2011, is bigger than what Jestin had previously anticipated. His earlier forecast had the central bank target rate climbing by a cumulative 200 points.

So which bank forecast will be correct when we see rates move from the historic low of .25%?  will we see rates go up by a factor of 10 as CIBC predicts, or a factor of 12 as in the Scotia outlook?  And what will this move mean for mortgages at renewal?