Mortgage Calculator Alberta

When applying for a mortgage in Canada it’s important to keep in mind property location. While most regulations are the same across the country, each province also has its own rules, taxes and fees that affect how much you can borrow. 

This calculator includes the costs of getting a mortgage in Alberta, and you can learn more about the province’s unique requirements below.

How to Calculate Mortgage Payments in Alberta

The four main factors that determine mortgage payments are purchase price, the amount of down payment, amortization, and interest rate.

 

Purchase prices in Alberta are higher because of the pandemic, but still relatively affordable compared to neighbouring BC. The average home value is currently $416,000, up 4% from $402,000 one year ago.

 

Down payment may vary from 5% to 20% or more. If the down payment is less than 20%, payments will be higher because a mortgage default insurance premium gets added to the mortgage amount. However, the additional cost may be offset by a lower interest rate because the mortgage is insured.

 

Insured mortgages must be paid back within 25 years, whereas mortgages with 20% down payment can be paid back over a longer amortization.

 

Here’s what your mortgage payments could look like to buy a $416,000 home in Alberta, with Nesto’s best 5-Year Fixed Rate:

 

Down Payment

5% or $20,800

20% or $83,200

Default Insurance

$15,808

N/A

Mortgage Amount

$411,008

$332,800

Amortization

25 Years

30 Years

Interest Rate

1.99%

2.14%

Mortgage Payments

$1,738/month

$1,252/month

 

Mortgage payments could be higher if the lender pays property taxes on your behalf, or if you choose to take life, disability, or critical illness insurance coverage.

 

Are Rates Different in Calgary, Edmonton and Other Cities?

Borrowers in Alberta have access to major banks, credit unions, and monoline lenders, as with any other province in Canada. 

When buying in Calgary or Edmonton you may get a better interest rate compared to other cities in Alberta. These areas are more marketable because of higher property values, and therefore more competitive from a lending perspective. 

Houses outside major city limits may have more limited lender options and higher mortgage rates, especially if the property has additional acreage, is not a typical family home, or is not connected to municipal water and septic lines. Credit unions can be an excellent option for residents in these satellite communities. 

Interest rates may also be higher or lower for reasons other than location. For example, rental properties typically have higher interest rates because lenders consider them to be a higher risk. Higher mortgage amounts are more desirable to lenders and may be eligible for lower rates.

Buyers should watch out for specific locations where extreme weather conditions can make it more difficult to get a mortgage, and property insurance which is required by all lenders. For example, some of the nicest homes in Calgary are in flood zones, which may require additional down payment and be costly to insure. For some homes in Fort McMurray, it is still impossible to get insurance because of wildfires five years ago.

 

Alberta & Canada Regulations, Taxes, and Fees

The good news for buyers is that while regulations, taxes, and fees for buying real estate are similar across Canada, they are especially attractive in Alberta. 

Not only does the province have some of the most affordable real estate in the country, but taxes and fees are extremely low as well. In most provinces land transfer tax can add thousands or tens of thousands of dollars to the purchase price, while Albertans need only pay a few hundred dollars in title transfer fees. Plus, property taxes are also very reasonable, consistently under 1%, and closer to 0.5% in many cities. However, other taxes such as GST may still apply to new builds in some cases.

Real estate closing costs in Alberta commonly include an appraisal and solicitor fees. An appraisal is usually not more than $500, and borrowers should budget an additional $1,500 for solicitor fees and including closing, registration, and title insurance.

 

Canadian Ministry of Finance Mortgage Guidelines

The minimum down payment in Canada: 

For properties under $500,000 the minimum down payment is 5%. For properties over $500,000, the minimum downpayment is 5% of the first $500,000 and 10% of the amount exceeding $500,000. Anything over $1 million requires at least 20% down payment. Rental properties that will not be owner occupied also require at least 20% down payment. 

 

The maximum amortization period: 

25 years for purchases with less than 20% down payment. With more than 20% down payment up to 40 years may be possible, however anything over the standard 30 years comes with substantially higher rates and fees.

 

Mortgage default insurance: 

Required for purchases with less than 20% down payment, to insure the lender in case of default. The borrower pays the premium of up to 4% which gets added to the mortgage amount.