Quite a bit of criticism has been leveled at the Bank of Israel following the rise in interest rates in the economy.
MK Dr. Shlomo Krei (Likud) called the move an "easy step, for which the public will pay the price" - and the public will indeed pay a price: the mortgage will become more expensive, young couples will have difficulty taking out new mortgages and households will have difficulty with existing ones.
But not raising interest rates will charge a significantly higher price.
Let's explain: the Bank of Israel's move is primarily intended to fight inflation - the rise in prices in the economy, which has already reached 3.5%, as well as the level of housing prices, which have jumped by 13% in the past year.
About 40% of the average mortgage is on an index-linked interest rate track, which has recently risen significantly.
In other words, if the Bank of Israel does not act to curb inflation, the index-linked interest rate path will continue to rise.
Beyond that, high inflation also affects the CPI-linked rent expenditure of many households.
It will probably take time for interest rates to start lowering inflation, and to really fight the cost of living, the government must end the start of reforms that increase competition by easing imports.
Reducing prices following the increase in interest rates is a slow and gradual process based on lowering demand: as interest rates in the economy rise, the public is given a new, more solid alternative to using money, such as savings.
The zero interest rate, which has been introduced in Israel in recent years, has led many to look for potential investment in real estate, thus fueling demand in this market.
The end of the era of zero interest rates symbolizes a return to normalcy, a way out of the crisis.
There is no longer any reason to encourage demand when prices are rising at a high rate.
Therefore, the Bank of Israel's move was considered and requested.
And what about households that will have difficulty meeting their monthly mortgage repayments?
The Bank of Israel has presented its interest rate forecast for another year from today, and it should help households prepare in accordance with the expenditure that is about to increase and possibly recalculate the route.
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