Best Mortgage Rates In Alberta For 2024 May

We reviewed 100 mortgage lenders that do business both online and in-person throughout Canada. The lenders we reviewed represent some of the largest mortgage lenders by volume in Canada, which includes banks, credit unions and online lenders. Lenders that didn’t operate in Alberta or provide their mortgage rates were not eligible for review.

Our conventional rates (rates that are uninsured) were generated through publicly available posted rates on the lender’s website, but also through the following borrower profiles that we presented to the lender anonymously by phone or online:

Profile 1

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $790,000
• Down Payment: 20% ($158,000)
• Credit Score: 700-719
• Postal Code: N2L 1V6 (Waterloo, Ontario)

Profile 2

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $1,300,000
• Down Payment: 20% ($260,000)
• Credit Score: 700-719
• Postal Code: V6A 2W5 (Vancouver, British Columbia)

Profile 3

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $300,000 ($60,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: S4P 3C8 (Regina, Saskatchewan)

Profile 4

• Property Type: Single-Family Home
• Property Usage: Primary Residence
• Purchase Price: $440,000 ($88,000)
• Down Payment: 20%
• Credit Score: 700-719
• Postal Code: B3S 0J1 (Halifax, Nova Scotia)

Our scores out of five are scored based on the following factors:

• Rate – 75%
• Timeliness – 5%
• Prepayment privileges – 5%
• Penalty calculation type – 10%
• Availability of discounted rates – 5%

Though these rates are accurate at the time of publication, they are intended only to provide a ballpark figure and sample of the rates a lender may offer in that province for that particular mortgage term. That does not mean that you will qualify for the above rates or that the lender in question hasn’t changed those rates since publication. Please consult a mortgage lender or broker to get the best rate possible for your particular property-buying circumstance and financial situation.

Rates as of May 6, 2024

In addition to the term of a mortgage(how long it lasts before a new contract is agreed upon, typically between one and five, seven and 10 years) there are also different types of mortgages—each suited for different consumer needs.

Open vs Closed Mortgage

Open mortgages allow homeowners to pay off their mortgage with few or -no penalties—through monthly payment increases or lump sum contributions. Though paying off a mortgage faster is appealing to many Canadians, open mortgages typically come with higher interest rates than closed mortgages to reflect this flexibility.

In contrast, closed mortgages come with lower interest rates on mortgages of similar length. But, they also come with prepayment penalties if you choose to contribute more than your agreed upon monthly payment or contribute a lump sum amount. Keep in mind that while closed mortgages are less flexible overall, many lenders allow borrowers to pay off a certain amount of their mortgage each year, penalty free.These are called prepayment privileges and their standard percentage is around 10% to 20% of the initial principal amount.

Fixed Mortgages

Fixed mortgages are ideal for borrowers that want predictability and less risk when it comes to their mortgage. These have set interest rates that stay the same throughout the mortgage’s term. This means your monthly payments will stay the same, too. Note that fixed mortgage rates conventionally have higher interest than variable rates (though currently you’ll see lenders offering variable rates at a higher rate than fixed due to complicated factors such as inflation, bond yields and the future trend of interest rates), and typically come with greater penalties if you choose to break your mortgage contract. Keep in mind that fixed mortgages can be either open or closed, depending on your lender and personal goals.

Variable Mortgages

Variable rate mortgages come with much more flexibility than fixed rate mortgages. Rather than locking in a rate at the beginning of a term, variable mortgages rates are based on a lender’s prime interest rate. These mortgages are ideal for consumers who want to take advantage of potential savings in a low interest rate environment.

Note that variable mortgages may have fluctuating rates, but these still have set monthly payments. If the interest rate increases, less of your payment goes toward the principal amount of your loan and more towards paying off the interest accrued. When interest rates climb so high that no part of your monthly payment goes toward the principal, then your mortgage is considered to have a negative amortization period, meaning that your loan balance is, in fact, increasing.

Currently, rates in Alberta hover between 4.84% and 7.04% for 5-year fixed-rate mortgages and 5.90% to 7.22% for 5-year variable mortgages. Rates for 3-year fixed mortgages range from 5.34% to 7.20%, and 3-year variable mortgages range from 6.30% to 8.90%.

According to our research, the best mortgage rates in Alberta are currently offered by Nesto Inc., at the following rates: 3-yr. variable: 6.35% (though Dominion Lending Centres and The Mortgage Centre offer 6.30% rates), 3-yr. fixed: 5.34%, 5-yr. variable: 5.90%, 5-yr. fixed: 4.84%, and 10-yr. fixed: 5.84%.

Though the rates listed above are the best in Alberta according to our research, there are a myriad of factors that affect what kind of a rate you can negotiate with a lender. Below is a short summary of the most common factors that affect your mortgage interest rate.

Your Down Payment

When purchasing a home, you are required to pay a portion of the overall price known as a down payment. With conventional mortgages, this amount is 20% of the price of the home. So, on a home worth $500,000, you would pay $100,000 upfront.

If you choose to pay less than 20% down, you will have to pay for mortgage default insurance. This is insurance that protects the lender by promising to compensate them should you default on your mortgage payments. If you are buying a home with an insured mortgage, your rates will typically be lower than conventional mortgages, as lenders are protected by the insurance you purchased.

Your Amortization Period

Your amortization period, or the amount of time it takes to pay off your mortgage in full, can also affect your mortgage rate, though it is less common. A typical amortization period is 25 years and is the maximum amount of time offered if you put down less than 20% for a down payment. Homebuyers who have a mortgage that is uninsurable because the amortization period on the mortgage is greater than 25 years and not eligible for mortgage insurance, are subject to higher mortgage rates.

Your Property Usage

Whether or not your home purchase is a rental property or a primary residence will affect the rates lenders offer you. Generally speaking, lenders set higher rates for rental/investment properties compared to residences because they are uninsurable and come with higher risk for lenders.

Your Mortgage Type

As mentioned above, the type of mortgage you have—fixed, open, closed or variable—will affect the rate lenders will offer you, and if that rate will change over time. In general, while your mortgage rate decreases with the length of your term (i.e. a 1-year term is usually lower than a 5-year term) a variable rate mortgage may (in today’s mortgage market) be slightly higher than a fixed rate mortgage of the same term.

Additionally, if you are refinancing a new mortgage—rather than renewing—you will likely face higher rates, as lenders take on more risk with refinancing transactions.

Your Employment Status

As with the other previously mentioned factors, risk plays a pivotal role. Your lenders will review your employment status to determine the risk they will take on if they offer you funds for a home purchase. While you may be able to get a mortgage if you are in a brand new position, or are newly self-employed, you could be facing higher mortgage rates as a result.

Moreover, if you are self-employed, make sure that you have been working for your business for at least two to three years before applying for a mortgage. Otherwise, you could have a difficult time getting financing, or will only qualify for astronomical rates.

Your Credit Score

As a way to determine the risk involved with giving you a mortgage, lenders will pull a credit check and review your credit score to see if you are reliable when it comes to paying your debts on time. If you have no credit score, or a poor one, you may have a hard time getting a mortgage—or if you do get one, it may be from an alternative or private lender that has less than ideal rates.

Your Debts

Though your debt is a factor considered by lenders as part of your credit history, it is even more important when you are qualifying for a mortgage. When determining if you can make your monthly mortgage payments, lenders will calculate two difference debt service ratios:

• Gross Debt Service (GDS) – The percentage of your monthly income that covers your housing costs alone. This ratio should not exceed 39%.
• Total Debt Service (TDS) – The percentage of your monthly income that covers your housing costs and any other debts. This ratio should not exceed 44%.

These calculations will determine, in part, whether or not you can borrow with a particular lender. Lenders that have highly competitive rates typically have higher risk standards, which may prevent potential homebuyers with poor debt service ratios from accessing lower rates.

According to data from the Alberta Real Estate Association, the average detached home price in Alberta clocks in at $507,900, a monthly gain of 2% and nearly 10% higher year-over-year. Assuming you are purchasing a home using a conventional mortgage requiring a down payment of 20%, you will need to pay $101,580 upfront. This would leave you with a principal mortgage amount of $406,320.

(Of course there are also regional prices variations as this average represents the entire province.)

Key Facts about the Alberta Market

According to data released from the Alberta Real Estate Association (AREA), the Alberta housing market saw record sales in 2023, with over 7,500 sales closing—a year-over-year increase of approximately 21%.

By the end of 2023, Alberta was also facing record housing inventory issues, with inventory levels having not been around 17,734 since 2006—right before the major financial crisis of 2008. This lack of inventory has led some real estate agents to notice major overbidding issues in the province, with homes in major centres such as Calgary or Edmonton selling for tens of thousands more over asking.

According to  AREA’s March 2024 market trend summary report, “inventory levels in the province were… nearly 25% lower than last year and well below long-term averages for the month.”  These low inventory levels and tight market conditions continue to push home prices higher.

About the Alberta Housing Market

Compared to the other provinces, Alberta’s housing prices are about middle of the pack at $491,962. British Columbia’s average home price is at the number one spot for most expensive at %1.018 million, with Ontario close behind at $889,033.

Though the overall Canadian housing market’s conditions are considered balanced, Alberta’s housing market conditions greatly favour sellers. This discrepancy is due to a 74% sales-to-new-listings ratio (SLNR), putting sellers in a position to sell in a high-demand market. This lack of supply  puts upward pressure on home prices.

In terms of the demographics, Calgary stands as the most expensive city, with an average home price of $580,400 in March 2024, up 10.9% year-over-year. Edmonton, Alberta’s other major city, has an average home price of $3385,900—up 4.5% in the last 12 months.

Aside from working on paying off your debt, keeping a clean credit history, ensuring your amortization period does not disqualify you for default insurance and maintaining a robust employment record, simply meeting with lenders and mortgage brokers in your area is likely the best way to get the best rate for you.

In addition to its housing market nuances and solid rates, Alberta has a few key regulations surrounding housing that consumers should be aware of.

Alberta Mortgage Lender Regulations

Banks, loan and trust companies are federally regulated under the Office of the Superintendent of Financial Institutions (OSFI) and the relevant pieces of legislation, such as the Bank Act and the Trust and Loan Companies Act. These acts, and OSFI, both set out and enforce the various regulations required upon all Canadian domestic banks and trust companies—including Alberta lenders.

Note that Alberta does have some Alberta-only government lenders, such as ATB Financial, that while created under their own legislation, are still subject to the same rules and regulations.

Alberta Mortgage Broker Regulations

The Real Estate Council of Alberta (RECA) is the independent authority in the province that sets, regulates and enforces real estate transaction, management and brokerage standards across the province. More specifically, the RECA derives its authoritative power from the Real Estate Act, and administers this act on behalf of the Government of Alberta.

Some specific regulations that mortgage brokers must follow include:

• Licensing. In order to work as a mortgage professional in Alberta, you need to complete the Mortgage Associates Program delivered by the Alberta Mortgage Brokers Association (AMBA), with an exam delivered by the RECA.
• Brokerage Standards. Mortgage brokerages across Alberta have certain standards they must meet according to the RECA regulations, such as ensuring any additional fees paid by borrowers must be disclosed in writing.

Arguably the best, and most efficient, way to save on your mortgage is to simply do your research and follow the points we mentioned above. This may mean:

• Working on your credit history and raising your credit score
• Setting money aside for a higher down payment
• Ensuring you have a stable job, or a stable source of income, for at least two to three years
  Weigh your options with multiple mortgage brokers or lenders

While making sure you get the lowest rate possible is important, so are other factors like prepayment penalties. If you are in a financial position where you have excess cash—or are expecting some soon—choosing an open mortgage so you can pay it down faster is a prudent choice. When it comes time to make a decision, do not rely simply on your own research, get trusted insights from industry professionals.

As with other provinces, Alberta has a host of first-time home buyer programs to help new homeowners achieve their homeownership goals. Here are the most notable.

First Home Savings Account: Officially released in April 2023, the First Home Savings Account (FHSA) allows first-time home buyers to save up to $40,000 total—$8,000 annually —towards a new home. The funds stored in the FHSA are both tax-deductible and tax-free, meaning the funds are never taxed so long as they are used for a home purchase, and you get tax deductions for depositing funds—similar to RRSPs.

Home Buyer’s Plan. The Home Buyer’s Plan (HBP) allows first-time buyers to withdraw $35,000 from their RRSPs tax-free. However, keep in mind, these funds need to be repaid to your RRSP within 15 years.

First-Time Home Buyer Incentive. The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which allows homebuyers to reduce their down payment by 5% to 10%, depending on the type of home being purchased. Note that because the government owns a portion of the mortgage, this incentive will need to be repaid to them after 25 years or when the property is sold—whichever comes first. The deadline for new applications and resubmissions to this program is now March 21, 2024. No new approvals will be granted after March 31, 2024. After this date, the program will be discontinued. Read our Feds Scrap First-Time Home Buyer Incentive Program article to learn more.