Mortgage rates in Alberta are at their lowest right now. Whether it’s fixed or variable rates, you can find a mortgage that will fit your financial situation. You can find the best mortgage rates in Alberta by comparing offers from both mortgage brokers and banks. We will be discussing the general state of the Alberta housing market, what you can do to find the best mortgage rates, and answer some of the frequently asked questions about them.
The housing market in Alberta
The two major cities in Alberta, Calgary, and Edmonton, have more expensive houses than the rest of the province. However, the average housing prices in both Calgary and Edmonton are well below the national average. As of 2020, the average housing price in Calgary is $411,000, while in Edmonton, it’s $312,000, half of Canada’s national average of $624,000. According to Statistics Canada, more than two-thirds of the residents of Calgary and Edmonton own their homes, which are on par with the national average.
Historical trends of Alberta’s mortgage rates
The housing prices in Alberta are low because the province has a low land transfer tax rate. Provinces like Ontario and British Columbia have a higher land transfer tax rate that adds to the purchase price, causing an increase in overall cost. However, first-time homebuyers in Alberta do not qualify for tax rebates unlike, homebuyers in other provinces such as Ontario.
Frequently asked questions about mortgages in Alberta
How much money can you save when comparing mortgage rates in Alberta?
There are many factors to be considered when you choose a mortgage including, the loan term, interest rate, pre-payment penalties and, more. Keep in mind that the rates will differ between banks and mortgage brokers. Comparing interest rates will help you find the best mortgage option and a lender that fits your requirements.
Which is better: fixed or variable rates?
It depends on your unique requirements. A fixed-rate will be better if you want stability and intend to pay the same amount every month. Otherwise, variable rates are a good option if you have the financial stability to make payments month to month regardless if they are lower or higher than the previous month. Consider your financial situation, what you are looking for in a mortgage, and your preferred mortgage term.
What’s the difference between variable and fixed mortgage rates?
Fixed-rate mortgages are where the interest rate is secured for a defined number of years. The rate stays unchanged even if the prime rate fluctuates. Variable rates are dependent on market conditions and can change if the prime rate changes. The changes do not impact your monthly payment. If the interest rate increases, a higher portion of your monthly payment will go towards interest rather than the principal amount. If the interest rate decreases, a higher percentage of your monthly payment will go towards principal repayment rather than interest.
Should I get an open or closed mortgage rate?
If you are looking for the ability to change your mortgage payments or make lump sum payments without restrictions, open mortgages will work to your advantage. With closed mortgages, there are restrictions and even penalties if you overpay.
Mortgage Maestro can help you lock in a low mortgage rate.