Steinbach Credit Union has raised its interest rates, matching Wednesday's announcement by the Bank of Canada.
Chief Executive Officer Glenn Friesen says their prime rate has gone up to 6.45 per cent, up half a percentage point. That means for someone with a $100,000 variable mortgage, their costs will go up $500 per year or about $42 per month.
Friesen says this is all fueled by inflation rates that have not been seen in many, many years.
"The Bank of Canada wants to slow that inflation down, and by doing so they've increased rates which will slow the people that are buying things," he explains. "It's basically supply and demand. As demand diminishes, the supply will get higher and the costs will come down."
SCU has also lifted savings rates but not by the same 50 basis points.
"Savers will be rewarded as well," he says. "The regular savings rate has gone up to 3.35 per cent."
Interest rates are the highest they have been since 2008. Friesen says though they cannot know for sure whether additional rate increases lie ahead, indications from the Bank of Canada are that this might be the last one.
"Personally, if I look in my own crystal ball, I can actually see some of these rates starting to drop in six to 12 months from now," suggests Friesen.
He notes as the economy slows; the Bank of Canada will back off on the rate increases.
"But for the next six to 12 months, there will be some pain that they have administered to the public in Canada," says Friesen.