Calgary Mortgage Rates

The reasons for the rise in price seen across all categories of housing in 2021 is because of:

1. Record low mortgage rates with the Bank of Canada overnight interest rate at 0.25%,
2. Very low housing inventory,
3. Optimism within Calgary's largest industry, the energy sector, and
4. An overall lift in how people are feeling about the economy post-pandemic

Should the economy have a strong recovery and high-paying jobs start to come back to the energy sector and to other major industries, home prices and demand could continue to rise.

Over the last 20 years, the average home price in Calgary has gone from ~$190,000 in 2001, to $510,908 currently, which is up 268%. This also means the average mortgage amount has also increased, likely in tandem with home prices at ~ 268% or more. Compared to other major cities across Canada such as Toronto, Ottawa, Vancouver, and Montreal, this is the lowest increase in average home price over the last 20 years:

Although Calgary’s housing market is fairly affordable when compared to other cities such as Vancouver’s housing market and Toronto’s housing market, some parts of Calgary have much higher prices than others. West Calgary and Central Calgary have higher prices when compared to the East and North ends of the city, where home prices are much more affordable.

Home Prices Across Calgary

With Calgary being the 4th largest city in Canada, there are many types of lenders to choose from that offer mortgages. The big 6 banks, which includes: RBC, TD Bank, Scotiabank, BMO, CIBC, and National Bank, all have branches and offices in Calgary where you can meet with a mortgage representative. As well, online banks such as Simplii Financial, Equitable Bank, Tangerine Bank, and MotusBank offer mortgage loans in Calgary over the internet. Other regional options in Calgary include Canadian Western Bank, ATB Financial, and CMLS Financial. Finally, a Calgary mortgage broker will offer you the ability to see mortgage offerings from countless mortgage lenders, which allows you to easily shop around for the best rate. Calgary has over 200 mortgage brokers located within the city.

Yes, getting a mortgage from a credit union in Calgary can be a common way to get the funding you need to buy a home in Calgary. A credit union is a financial institution that is owned by its customers and the people that bank with it. Credit unions tend to be more local, and Calgary credit unions will only offer mortgages within Calgary or within the province of Alberta. Getting a mortgage with a credit union may be easier than a traditional bank because credit unions do not require you to pass a mortgage stress test to purchase a home, allowing you to have more flexibility when determining your mortgage affordability. Since credit unions are owned by their customers and their goal is not only to earn a profit, they may offer mortgage rates that are lower than other traditional lenders do in Calgary. There are multiple different credit unions operating within the city, including the following credit unions which have branch locations in Calgary:

• Bow Valley Credit Union,
• The Calgary Police Credit Union,
• Connect First Credit Union,
• Khalsa Credit Union,
• Servus Credit Union,
• Spark The Energy Credit Union, and
• TransCanada Credit Union

Calgary is seen as a very affordable city to live in, making it easier to save up for a down payment on a home while covering your basic living expenses. The average monthly cost of living in Calgary for a family of 3 with a young child is $4,240 per month. This breaks down to:

• $1,669 on housing, which includes a 2 bedroom apartment with utilities,
• $365 for the cost of owning a car, including gas, insurance, and maintenance,
• $1,131 for total food costs, and
• $1,075 for preschool

With Calgary’s median after-tax household income being $7,100 per month, This means the average household would have $2,860 per month left after basic living expenses. If all of this money leftover went towards a down payment, it would take ~3 years to save up for a 20% down payment on the average Calgary home price of $510,908.

With Calgary’s median after-tax household income being $7,100 per month, This means the average household would have $2,860 per month left after basic living expenses. If all of this money leftover went towards a down payment, it would take ~3 years to save up for a 20% down payment on the average Calgary home price of $510,908.

Cost of Living in Calgary

Calgary is the largest city in Alberta and the fourth largest city in Canada. Calgary's population has seen steady growth over the past 10 years, rising by 24.4% from 2010 to 2020. Calgary’s population outlook forecasts the number of people in the city to grow from 1,306,000 people in 2020 to 1,409,000 people by 2026. As the population in Calgary continues to grow, the demand for housing will only continue to grow as well.

Calgary's largest industry is the energy sector, and the city has many large employers within this industry, such as: Suncor Energy, Shell Canada, Canadian Natural Resources, TC Energy, and Imperial Oil. As the price of oil has struggled in recent years, companies in the sector have had to let staff go, bringing up unemployment and hurting Calgary’s overall economy. Other large employers in the city include: Telus, Shaw Communications, Alberta Health Services, WestJet, and Dow Chemicals. As many of these large employers continue to grow, and if the energy sector and the price of oil have a strong rebound, the demand for homes in Calgary should benefit.

Calgary and the surrounding area saw its population grow in 2020, aided by the help of migration to the city. Although the number of new people who moved to Calgary fell from 2019 because of the COVID-19 pandemic, there still were 19,899 net new people who moved to the city. This breaks down to 15,792 people migrating internationally to Calgary, 1931 people migrating within other provinces in Canada to Calgary, and 2176 people migrating to Calgary from within the province of Alberta. The main reasons for Calgary attracting migration to the city is its relatively affordable living costs and housing prices, the high household incomes that Calgarians have compared to the rest of the country, and Calgary’s growing diversity. As Calgary continues to attract more people throughout Canada, Alberta, and worldwide as the pandemic starts to subside, Calgary’s economy and housing market should benefit.

Net Migration to Calgary, 2020

The City of Calgary has a high vacancy rate of 6.5%, which is much higher than the Canadian national average for large metropolitan areas of 3.4%. The vacancy rate is especially high in the downtown area of Calgary, where it is 8.8%. With Calgary's regional population continuing to grow, this rising vacancy rate displays how the city has been able to more than keep up with the demand for building new homes. This is a positive sign for home buyers, as it shows that low inventory levels of homes will be fixed over the long term as new construction enters the market, helping buyers not to worry about current limited home buying options. With such a high vacancy rate, it also may be a good time to rent, meaning that comparing the benefits of renting and buying with WOWA’s rent vs buy calculator can help you make a more informed decision on which is the best option for your situation.

As home prices in the city fell from 2018 to 2020, property tax rates in Calgary rose, from 0.6357% in 2018 to 0.6654% in 2019, and now to 0.7522% in 2020. However, the property tax rate in the city is still the lowest in Alberta among major population centres, shown in the table below:

Property taxes are very important to consider when determining how large of a mortgage you are comfortable taking out. The higher your property tax expense is, the more you will pay towards overall housing expenses. This means that with a lower tax rate, you will be paying less in housing expenses which will allow you more room in your budget to afford a larger mortgage. Similar to across Canada, property taxes in Calgary are typically paid monthly through your lender, who then pays the city on your behalf. You can also pay your property taxes directly to the city, such as through Calgary’s Tax Instalment Payment Plan (TIPP), or as one annual payment in June.

Yes, your mortgage lender in Calgary will allow you to pay your property tax amount through them monthly along with your mortgage payments. Most lenders will actually require you to pay your property taxes through them monthly, as a way to prevent you from missing payments and paying late. This is usually most common for first time home buyers and people who have a lower down payment amount or income levels, so that the lender does not face the risk of having the city of Calgary place a lien on the property which they are using as collateral for your mortgage.

Pros & Cons of Paying Your Property Taxes with your Mortgage: