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Rates in Alberta
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*Insured loans. Other conditions apply. Rate in effect as of today.
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Your Guide to Getting the Best Mortgage Rates in Alberta
When you’re looking to find the very best mortgage rates in Alberta, nesto is your one-stop shop. You can always rely on us to help you better understand how to navigate mortgages in any kind of market and provide the very best interest rate upfront.
Located in western Canada – the most westly of the three Prairie provinces, Alberta is bordered by the Canadian Rocky Mountains to the west and vast prairies and badlands to the east. To the north is the Northwest Territories. The state of Montana is the nearest southern neighbour in the United States, sharing an international peace park (Waterton-Glacier International Peace Park).
Key facts about Alberta:
- Edmonton is the capital and second-largest city of Alberta (Calgary is the largest). Edmonton is a cultural, governmental and educational centre. It hosts a year-round slate of festivals, reflected in the nickname “Canada’s Festival City”
- The southern portion of Alberta consists mainly of plains that are almost entirely treeless. As the slopes of the Rocky Mountains to the west are reached, more trees are found until in the foothills of the mountains, bodies of forest timber occur. Trees also become more numerous in the northern part of the province
- Alberta has five national parks and 76 provincial parks. Jasper National Park is the largest national park in the Canadian Rockies, spanning 11,000 square kilometers. The park includes the glaciers of the Columbia Icefield, hot springs, lakes, waterfalls and mountains
Learn About Rates & Mortgages in Alberta
Welcome to our Frequently-Asked Questions (FAQ) section, where we answer the most popular questions our nesto advisors receive on a daily basis across Alberta, designed to help you make informed mortgage decisions every time you need a new mortgage or to renew/refinance an existing one.
What are today’s mortgage rates in Alberta?
Today’s mortgage rates in Alberta vary depending on the specific bank or other lender offering each product. nesto’s advanced technology empowers us to ensure you always have the latest rate information at your fingertips to help you make the most informed decisions about whether to stay the course or lock in your rate (see chart).
Why compare Alberta mortgage rates on nesto?
By comparing Alberta mortgage rates on nesto, you’re always getting the most up-to-date information, which helps you save money throughout your time as a homeowner.
When comparing rates, be sure to look at similar terms (such as three or five years) and mortgage types (fixed rate vs variable rate) so you’re measuring similar products and not looking solely at rates. Mortgage rates and features vary by lender so, in order to gain an accurate comparison, you have to look at similar offerings.
Should I get an open or closed mortgage in Alberta?
Whether you should select an open or closed mortgage in Alberta depends on your specific life and financial circumstances.
When looking at open vs closed mortgages, it’s important to note that open mortgages are priced higher because of the flexibility they offer to pay the mortgage off at any time without facing a penalty. If you have no need to pay the mortgage off quickly, it makes sense to select a closed mortgage and benefit from lower rates.
Should I use a mortgage broker or lender in Alberta?
A mortgage broker is a professional who can negotiate the best mortgage by comparing all the offerings from multiple lenders, including banks, credit unions and trust companies, as well as alternative and private funding specialists. In other words, the mortgage broker acts as an intermediary between the borrower and the lender.
A mortgage lender is one financial institution or bank that offers a single line of mortgage products direct to borrowers. The lender’s mortgage specialists only have access to their own mortgage products.
nesto advisors offer the lowest rate upfront every time. Yes, we make less than the average broker or mortgage specialist, but we get the peace of mind knowing that we helped you save thousands of dollars on your mortgage.
Should I try to find a mortgage with a rate hold in Alberta?
If you’re planning to buy Alberta property in the future, it’s a wise choice to request that nesto secure a rate hold on your behalf so you don’t have to worry about interest rates rising while you’re home shopping.
Ensuring you have a rate hold in place is like having insurance on your mortgage rate – you no longer have to worry about mortgage rates increasing while you find your new home over the next 90-120 days.
About the Alberta Housing Market
The Calgary and Edmonton markets shifted from balanced conditions in 2020 to seller’s markets in 2021, which is expected to continue throughout 2022, pushing sales prices upward. This is attributed to heightened demand prompted by the inter-provincial migration trend that took place in 2021, which saw many home buyers from Ontario and British Columbia driving demand high, while supply remained low.
With housing prices in Alberta hovering below the national average (and well below prices in larger markets such as Toronto and Vancouver), many first-time home buyers and investors alike have been flooding the Calgary and Edmonton housing markets.
First-Time Home Buyer Programs in Alberta
There are several first-time home buyer incentives and programs available in Alberta that were designed specifically to help lighten the financial burden for first-time home buyers. These programs will offset some home buying costs as well as help fund your down payment, which is often one of the biggest hurdles involved in buying your first home. See: First-Time Home Buyer Programs in Canada
What are the Different Types of Mortgages?
Open VS Closed Mortgage
With an open mortgage, you’re able to prepay any amount of your mortgage at any time without facing a prepayment penalty. The compromise for having an open mortgage is that interest rates are higher to make up for the flexibility of being able to pay it off at any time.
With a closed mortgage, on the other hand, the interest rate is more attractive than a closed mortgage because you’re limited by how much extra you can pay towards your mortgage each year. So, the compromise here is that you’ll face a prepayment limit. This means that you’re only permitted to pay a certain percentage of your original or current balance per year – often 15%, on average, but this varies between lenders. If you have the choice, be sure to always opt for the original balance prepayment option as it will enable you to pay off more in a year. And if you choose to pay more than your annual limit, you’ll receive a prepayment penalty. It’s important, therefore, to be aware of your limits and stay within them.
Fixed-rate mortgages make up 70% of all mortgages in Canada. A fixed-rate mortgage keeps your interest rate steady over the term of your mortgage (1-10 years). There’s no doubt that the five-year fixed-rate mortgage is the most common choice selected by Canadian homeowners. But, this isn’t the best option for everyone, regardless of its popularity. Fixed-rate mortgages appeal to homebuyers who are looking for a dependable payment schedule, manage a tight monthly budget or are generally more conservative. For instance, Millennials with large mortgages relative to their income may be better off opting for the peace of mind provided by a fixed rate and payments.
Variable interest rate mortgages
A variable interest rate can increase and decrease during your term. If you choose a variable interest rate, your rate may be lower than if you selected a fixed rate.
There are two types of variable mortgages: a) Variable rates with Fixed payments and b) Variable rates with Adjustable payments
Fixed payments with a variable interest rate
In general, under this option, the payment remains fixed over time despite variations of the interest rate.
If the interest rate goes up, more of your payment goes towards the interest, and less to the principal.
If the interest rate goes down, more of your payment goes towards to the principal. This means, you pay off your mortgage faster.
That being said, if the market interest rates increase to a certain percentage or trigger point, your lender may increase your payments. This payment increase will make sure that you pay off your mortgage by the end of the amortization period. The trigger point is listed in your mortgage contract.
Adjustable payments with a variable interest rate
With adjustable payments, the amount of your payment changes if the interest rate changes. A set amount of each payment applies to the principal. The interest portion changes as the interest rates change. You’ll know in advance how much of the principal you’ll have paid at the end of the term.
Land transfer tax in Alberta
Alberta’s land title transfer fees are calculated based on two factors: 1) Your home’s value; and 2) Your mortgage amount. Rates are outlined in the chart below:
|Charged on Property Value||$50 base + $2 for every $5,000 or portion thereof of the property value|
|Charged on Mortgage Amount||$50 base +$1.50 for every $5,000 or part thereof of the mortgage amount|
What Affects My Mortgage Rate in Alberta?
Factors such as credit score and income play a big part in qualifying for the lowest interest rate in Alberta. The riskier a borrower appears, the higher the interest rate can be. Rate is definitely not the most important aspect of a mortgage, however, as many rock-bottom rates often come from no-frills mortgage products. In other words, even if a borrower qualifies for the lowest rate, they must often give up other features such as prepayments and porting privileges when opting for the lowest-rate product.
There are many other ways to save money over the mortgage term instead of taking the lowest rate, including rounding up mortgage payments or making lumpsum payments when bonuses, etc are received throughout the year. It’s important, however, not to exceed the allowable limit on annual extra payments with your lender.
The size of your down payment will determine whether you must also pay mortgage default insurance in addition to your regular mortgage payments. Mortgage default insurance is required any time you make a down payment that’s less than 20% of the property’s value.
If you select a longer amortization period (the maximum is 25 years on mortgages with less than a 20% down payment and 30 years on mortgages with down payments of 20% or higher), your individual mortgage payment will be lower because they’re spread out over a longer period of time. Longer amortizations can come equipped with higher interest rates. You’ll also pay more interest the longer you take to pay off your mortgage.
If you’re buying a home that you personally intend to live in, this is considered your primary residence and is known as owner occupied. If you’re buying an investment property that you intend to rent to others, you’ll pay higher interest rates than on your primary residence. The logic behind this is that people will pay the mortgage on their primary residence before any rental properties. As such, lenders build added risk into the rates for rental properties.
The type of mortgage you select – such as variable vs fixed and open vs closed – will play a role in your mortgage rate. Each selection is a personal choice based on a number of factors.
When looking at open vs closed mortgages, for instance, it’s important to note that open mortgages are priced higher because of the flexibility they offer to pay the mortgage off at any time without facing a penalty.
And while variable mortgages have proven to be more cost effective over time than fixed mortgages, some people prefer the certainty of having the same payment throughout the mortgage term as is the case with fixed mortgages.
Your Credit Score
The ideal candidate for a traditional mortgage lender has a credit score that’s 680 and above. The higher the score is above 700 the better – with a maximum score of 900 possible – as borrowers will qualify for the lowest rates. There are options available for people with lower scores as well, but you can expect rates to be higher and terms to be shorter in these circumstances. nesto has strict lending guidelines that require a minimum credit score and no recent missed payments.
How nesto Works
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Globally, a mortgage professional knows the market’s best rates every time they check their email. Only a few of them will give you that rate without making you work for it. nesto’s here to change the industry for this very reason. You always get the best rate upfront with nesto.
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*Applicable with an accepted offer to purchase or renew. Conditions apply