The Chief Executive Officer for Steinbach Credit Union says the Bank of Canada's decision to lower interest rates came as no surprise.
On Wednesday, the Bank of Canada announced it has lowered its key lending rate by a quarter point to 2.5 per cent. This is the first adjustment since March of this year. In April 2024, interest rates were at five per cent.
Curtis Wennberg says Wednesday's adjustment was projected by experts in the bond markets.
"It wasn't a surprise to Steinbach Credit Union at all," he says. "And we were looking at this as a potential."
As a result of the move by the Bank of Canada, Wennberg says Steinbach Credit Union has decided to lower its prime rate by the same 25 basis points, to 4.70 per cent.
But Wennberg says they are considering keeping their savings rates unchanged. SCU's High Interest Savings Account (HISA) remains at 2.25 per cent.
"Often, what you will see is banks and credit unions will drop down on the borrowing rates but then also drop down on the same amount on savings rates," he explains. "We may leave our savings rates where they are, and so that's just giving more back to our members."
Putting this into perspective, for those paying off a $300,000 mortgage with a variable rate, Wennberg says this week's announcement will result in a savings of $45 per month.
"So as the end of the year rolls around, you're going to be saving over $500 a year in interest," he adds. "If you've got the higher mortgage, of course, it's just even more money that you would save."
According to Wennberg, there could be another interest rate cut happening this year yet. He notes this week's decision, plus another potential cut, is because of the latest economic considerations, job market data, and other economic factors.
"This is something the Bank of Canada is looking at and thinking the reduction is going to help out with," he explains.
Meanwhile, Wennberg says SCU has a boost campaign that is underway from now until the middle of October. He says if you want to lock in savings for one to five years, they are giving a boost of 15 basis points on top of their standard rates.
With files from The Canadian Press