This was the year when interest rates finally rose for the first time since 2010. And despite that, it was also the year when Canadians smashed all previous debt records, with data showing that the average household now owes $1.72 for every dollar of disposable income.READ MORE: Canada’s low-income households owe $3.33 for every $1 they earn: Stats CanadaStory continues belowInterest rates are widely expected to continue their gradual climb in 2018, but can Canadians keep digging themselves deeper and deeper into the red?“The dam [containing Canada’s household debt] hasn’t cracked yet,” said Douglas Hoyes, a licensed insolvency trustee at Ontario-based Hoyes Michalos. But, he added, “2017 was the calm before the storm.”This doesn’t mean the sky will fall on financially overstretched Canadians in 2018. Indeed, Hoyes thinks 2018 will likely play out more or less as this year did.Still, there will be a lot of factors increasing the squeeze on borrowers over the next 12 months – and some of them could hit debt-burdened households harder than expected.Interest rates will continue to riseEconomists expect the Bank of Canada (BoC) to continue its slow upward march on interest rates next year.The Bank of Montreal currently forecasts three rate hikes, with the BoC’s trendsetting policy rate ending 2018 at 1.75 per cent, up from the current 1 per cent.But NAFTA woes and BoC governor Stephen Poloz’s concern about youth unemployment and underemployment might mean the central bank will proceed even more cautiously, upping rates by only half of a percentage point next year, said Douglas Porter, chief economist at BMO Financial Group.READ MORE: Bank of Canada keeps interest rates steady, leaves economists guessing about next hikeEven that, though, would mean interest rates will have climbed by a full percentage point since July of 2017.Someone with a variable mortgage rate of 3 per cent in early 2017 might end up with a rate of 4 per cent by the end of 2018, which represents a 30 per cent increase, noted Hoyes.“That’s a potential risk factor,” he said.WATCH: What an increased interest rate means for Canadians