Alberta Mortgage Rates.

From mountains to prairies to desert badlands, Alberta is the fourth largest province in Canada with over 4.4 million people. Alberta had the second largest year-over-year population growth among Canada’s provinces in early 2021. The Government of Alberta estimates that 80% of Alberta’s population will live in the Edmonton-Calgary corridor by 2046, which includes Red Deer and Airdrie. The province is becoming a hot real estate market, and buying a house in Alberta could be a great decision.

2021 was a record year for Calgary home sales. The Calgary Real Estate Board found that the high purchase volume was primarily due to concerns over inflation and rising interest rates. Additionally, an unusual amount of sales happened in December. Over 1,700 transactions happened in the month, which is a 45% increase compared to December of 2020. As of December 2021, the average home price in the Calgary housing market is $477,977. It is expected that mortgage rates will rise in 2022 and 2023 to cool the housing market.

The Edmonton housing market saw similar gains in sales in 2021, featuring a 19% increase in sales in 2021 year-over-year. This was partly led by sales of condo apartments, which increased by 25%, while detached sales lagged behind at a 16% increase.

The average age of a mortgage applicant in Alberta is 35 years old, while the average annual gross income of a mortgage applicant is $67,500.

Source: CMHC

Meanwhile, average mortgage payments made by Albertans are higher than the national average. In 2021, the average monthly mortgage payment in Calgary was $1,523. In comparison, the average in Ottawa was $1,331, in Montreal it was $1,187, and the national average was $1,382.

Source: CMHC

On the other hand, the size of Albertan mortgages hasn’t grown as quickly as the rest of the country. In 2021, the average Alberta mortgage was $337,000, compared to the national average of $375,000.

Canada’s Big Banks can be found throughout the country, and include RBC, TD, Scotiabank, CIBC, and BMO all having branches in Alberta. There are 16 credit unions in Alberta with a total of over 600,000 members. Competitive credit union mortgage rates in Alberta offer a low-interest alternative to the major banks.

The largest credit union in Alberta is Servus Credit Union, which is also the fourth largest credit union in Canada, and includes First Calgary Financial, Chinook Financial, Mountain View Financial, and Legacy Financial. ConnectFirst Credit Union, and Vision Credit Unions are Alberta's second and third-largest credit unions. There are many credit unions in Alberta, which you can find in our article about all credit unions in Canada.

Banks headquartered in Alberta include Bridgewater Bank in Calgary and Canadian Western Bank in Edmonton. ATB Financial is a provincial crown corporation and is the only financial institution in Canada owned by a province. ATB Financial only operates within Alberta.

Branch data as of July 2021.
Note: Meridian does not operate in Alberta or BC

There are 2,326 licensed mortgage brokers and associates in Alberta, 1,345 of which are members of the Alberta Mortgage Brokers Association (AMBA). Some members of the AMBA include Invis, Mortgage Intelligence, Mortgage Alliance, and Verico, who are all part of the M3 Financial Group, the largest non-bank mortgage originator in Canada. Other mortgage brokers include Axiom, Apex Mortgage, MMG Mortgages, Trilogy Mortgage Corporation, and Quantus Mortgage Solutions. Many of these brokers also offer land loans to help you buy land in Alberta.

The Real Estate Council of Alberta (RECA) licenses 974 mortgage brokerages in Alberta, 343 associate mortgage brokers, and 2,139 mortgage associates as of September 2021. RECA also oversaw 910 complaints and investigations in 2020, sending out $228,550 in fines and administrative penalties.

Through their Real Estate Assurance Fund, RECA paid over $101,358 from 2019 to 2020 in claims to consumers to compensate for fraud or breaches of trust in real estate and mortgage transactions. Provincially regulated financial institutions, such as credit unions, are overseen by the Alberta Superintendent of Financial Institutions.

Owned by the Province of Alberta, and with 162 branches, ATB Financial is one of the largest financial institutions in Alberta. ATB offers mortgages with terms from 6 months to 7 years and offers up to $1,500 cashback for mortgages over $300,000. With an ATB mortgage, you can renew 90 days early, port your mortgage to a new home, and blend and extend your ATB mortgage rates. ATB also lets you build residential outbuildings with your mortgage. This includes adding a garage or suite to your residential property.

As of September 30, 2021, ATB had over $16.4 billion in residential mortgages. 60.1% of ATB mortgages are insured by CMHC, Sagen, or Canada Guaranty, while 39.9% are uninsured. The proportion of insured mortgages with ATB decreased slightly from 2020, when 64.3% were insured.

Most ATB mortgages have an amortization period that is less than 25 years. Only 8.5% of ATB mortgages had an amortization of 25 years to 35 years. Looking at the average loan-to-value ratio (LTV), the average LTV of an ATB mortgage was 68%.

Headquartered in Edmonton, Canadian Western Bank has branches in Alberta, British Columbia, Saskatchewan, Manitoba, and Ontario. Most of Canadian Western Bank’s business is outside of Alberta. In 2020, 32% of CWB's loans were made in Alberta, while 32% were in British Columbia, 23% in Ontario, and 13% in the rest of Canada.

CWB works extensively with mortgage brokers. 47% of CWB's residential mortgages were alternative mortgages sourced through brokers using CWB Optimum.

CWB offers fixed, variable, and convertible Alberta mortgage rates. CWB's HOMEWORKS allows you to consolidate your mortgage and other debt into one HELOC, with the option of blending fixed and variable mortgage rates.

Servus Credit Union is the fourth largest credit union in Canada with 380,000 members and $17 billion in assets. With 102 branches throughout Alberta, Servus has the highest number of branch locations out of any other credit union in Canada outside of Quebec. Servus has 22 branches in Edmonton, 11 branches in Calgary, and 6 branches in Red Deer, making Servus accessible for both urban and rural customers.

Servus Credit Union only allows Alberta residents that are within 75 kilometres of their nearest branch to join. A Servus membership equity share costs $1 to join, with the ability to purchase up to $40,000 in Servus shares.

Servus offers high-ratio-insured mortgages in addition to conventional mortgages. One of the unique features of being a Servus member is their Profit Share program, which gives dividends that are used to directly pay down your mortgage principal balance. This helps you to pay off your Servus mortgage faster while paying less in mortgage interest. Servus members also receive a 10% discount off an annual membership to Servus Place, a 320,000 square feet community centre located in St. Albert, Alberta.

The amount that you are eligible for under the Servus Profit Share program depends on the balance of your accounts that you hold with Servus. As an example, a $500,000 Servus mortgage would have received a $850 cash back payment in 2021.

Servus's Profit Share has paid $470 million since 2009. In 2020, Servus paid $33 million in cash as patronage dividends back to members. An additional $20 million dividend was paid to common shares as a dividend.

connectFirst Credit Union has 41 branches across Alberta, and offers fixed and variable rate mortgages for properties within Alberta. For first-time homebuyers in Alberta, connectFirst offers a low-rate high-ratio insured mortgage. connectFirst’s insured mortgages are insured by CUMIS, a subsidiary of The Co-operators.

connectFirst offers residential, commercial, and agricultural mortgages and loans. In 2020, connectFirst had $2.42 billion in residential mortgages, of which 21% were insured and 79% were uninsured. There was also $1.46 billion in commercial mortgages and $318 million in agricultural mortgages.

A look at connectFirst's mortgage securitization gives us a sneak peek at their cost of funds, which affects their Alberta mortgage rates. Their secured borrowings in the Canadian Mortgage Bond (CMB) had a pricing yield of 1.0268% to 2.5898%, while their National Housing Act Mortgage-Backed Securities (NHA MBS) had a pricing yield of 1.1565% to 3.2152%, for 4-year maturities.

On November 1, 2021, connectFirst merged with SPARK credit union. The merger resulted in one of Canada’s largest credit unions. Together, they serve 130,000 members across 44 different communities in Alberta. Additionally, they now employ roughly 750 Alberta residents and oversee $6 Billion in assets.

Vision Credit Union offers residential, commercial, and agricultural mortgages. Vision Credit Union’s Profit Shares gives back on average 25% of mortgage interest paid, and boosts savings interest by 25%.

For example, a $300,000 mortgage that pays $12,000 in mortgage interest in 2020 at a 4% mortgage rate would receive $3,000 in profit shares patronage allocation. 10% of your profit share balance can be cashed out every year. This helps to reduce your Alberta mortgage rate.

On August 1, 2021, Vision Credit Union merged with Pincher Creek Credit Union. The purpose of the merger was to provide members with more product offerings and specialized expertise. Together, the two credit unions serve over 26,000 members across 18 branches. Additionally, there are now 185 employees overseeing $1.4 Billion in assets.

Lakeland is an emerging credit union located in Bonnyville and Cold Lake, Alberta. Lakeland offers mortgage terms ranging between 1 year to 5 years. Lakeland also offers home equity and RRSP loans. Their RRSP contribution loan allows you to maximize your annual RRSP contribution and save on your Alberta income tax.

As of December 2021, Lakeland had $658 Million assets under management and 11,000 members. Lakeland offers AgriInvest accounts for agricultural producers. Each year, producers can receive a matching contribution from the Canadian government for deposits made into an AgriInvest account.

• ABCU Credit Union
• Beaumont Credit Union
• Bow Valley Credit Union
• Calgary Police Credit Union
• Christian Credit Union
• Connect First Credit Union
• Encompass Credit Union
• 1st Choice Savings and Credit Union
• Khalsa Credit Union (Alberta)
• Lakeland Credit Union
• Pincher Creek Credit Union
• Rocky Credit Union
• Servus Credit Union
• TransCanada Credit Union
• Vermilion Credit Union
• Vision Credit Union

Just like other provinces, the Financial Consumer Agency of Canada (FCAC) and the Office of the Superintendent of Financial Institutions (OFSI) regulates federal banks in Alberta, and customers of these banks are protected by the Canadian Deposit Insurance Corporation (CDIC) for eligible deposits.

Since ATB Financial is a provincial financial institution, not a federal one, ATB is provincially regulated through the ATB Financial Act, Financial Administration Act, Government Accountability Act and Alberta Public Agencies Governance Act. ATB's investor services are still regulated federally by the Investment Industry Regulatory Organization of Canada (IIROC).

Credit unions in Alberta are provincially regulated through Alberta’s Credit Union Act, and are overseen by the Credit Union Deposit Guarantee Corporation (CUDGC) and the provincial trade association Credit Union Central Alberta (Alberta Central).

The CUDGC guarantees all deposits at Alberta credit unions with no limits, excluding investments. For ATB Financial, the Government of Alberta guarantees all deposits. This is unique from some other provinces in Canada that have limits, such as Ontario covering up to $100,000 or Quebec up to $250,000.

Alberta-regulated financial institutions (ARFIs) are also supervised by the Office of the Alberta Superintendent of Financial Institutions (ASFI), similar to the federal Office of the Superintendent of Financial Institutions of Canada (OSFI).

Mortgage brokers are regulated through the Real Estate Act of Alberta, and are administered by the Real Estate Council of Alberta (RECA).

Alberta has among the highest mortgage delinquency rates in Canada. In late 2021, 0.42% of Alberta mortgages were delinquent, meaning that they were 90 days past due or more, compared to the Canadian average of 0.20%. This history of higher than average mortgage defaults can be seen through to 2013, where Alberta had a delinquency rate of 0.52% compared to Canada’s 0.37%.

Source: CMHC

Alberta’s Law of Property Act includes mortgage rights and foreclosure proceedings. Before a lender can sell a property, a redemption period gives the borrower time to repay the mortgage. For farm land, the redemption time is one year, while all other property is 6 months.

If the foreclosure sale does not cover the mortgage, a deficiency judgment may force the borrower to repay the remaining amount to the lender.

Alberta is a very friendly province for landlords in Canada. There are benefits to being a landlord when purchasing a property, receiving rental income, and dealing with tenants. Initially, there was a flat land transfer tax in Alberta. Alberta’s property closing costs are significantly lower because you must only pay a total of $420 when purchasing a property. For comparison, purchasing an $800,000 home will cost $24,950 in land transfer tax in regions like the Toronto Real Estate Market.

Alberta also has a favourable income tax rate. Up until 2015, Alberta had a flat tax rate of 10%. This means that your average tax rate would not increase with your income. However, Alberta still has a reasonable tax rate with only 10% being charged on roughly the first $130,000 of your income. This is beneficial to real estate investors who will pay less tax on their rental property income.

Finally, Alberta has the fastest process of evicting a tenant in Canada. The process only takes between 1 - 14 days.

Housing prices in Alberta are slightly lower compared to Ontario or neighbouring British Columbia. The average price of a home in Calgary’s housing market was $510,701 for sold homes in January 2022, and $376,923 in Edmonton.

Over the past ten years, from 2011 to 2021, home prices in Calgary’s and Edmonton’s housing market have risen, but they have also lagged behind price growth seen in Toronto or Vancouver. According to Royal LePage, condo prices in Calgary and Edmonton saw no growth over the last ten years, while detached homes grew by just over 2% per year. That’s below the 7% annualized price growth for detached homes seen in Vancouver.