Double-down again to an interest rate of 21 percent, the high back in 1981, and your monthly payment jumps to $3,378.97. Although it’s unlikely that rates will hit the likes of 15-20 percent again, we may very well see 5-7 percent in the long run. That type of a jump may still be 2-3 times higher than your current In the 1970s and 1980s, economists found that uncertainty also affected interest rates. Real interest rates — that is, the stated rates minus the expected inflation rate — had risen above 8 per cent by 1990, because in a time of economic instability, lenders had attempted to protect themselves from uncertainty. The Bank of Canada lowered its benchmark interest rate by 50 bps to 0.75 percent at a surprise meeting on March 13th. It follows a cut by a similar margin last week and brings borrowing costs to its lowest level since August 2017.