Calgary's Best Mortgage Rates

For years, Canadian home buyers have enjoyed record-low mortgage rates. The rates had crossed their high point in the 80s and had gradually reduced over the next three decades. 

However, over the last three years, fixed and variable mortgage rates have increased in a bid to keep inflation under control. Towards the end of 2022, the Bank of Canada increased the overnight rate to 4.5% from the previous 3.75%, the highest since the 2008 recession. 

Typically, the BoC makes small increments of not more than 0.25%. This means mortgage rates are bound to remain high for some time. However, first-time home buyers can still use some tricks to negotiate Calgary’s best mortgage rates.

What is the Best Mortgage Rate?

The best mortgage rate is the one with the lowest possible rate you can qualify for based on the mortgage amount and the type of mortgage. Factors like your credit score and personal financial aspects also affect mortgage rates. 

How Do You Find the Best Mortgage Rates in Calgary?

When comparing mortgage rates from multiple lenders, you want to look at the annual percentage rate, not just the mortgage rate. That’s because interest rates don’t reflect the actual mortgage rates charged. 

Conversely, the annual percentage rate (APR) is a sum of the interest rate and other costs, like the closing costs charged on a mortgage. You can also improve your chances of landing the best mortgage rate by:

Improving your credit score

A good credit score increases your chances of getting a favourable mortgage rate. The credit score should be between 680 and 720 or above. If working with co-borrowers, they must also have a high score.

Reasonable Debt Ratio

A good rule of thumb is to ensure your debt ratio is 40% or less of your monthly income. This means your monthly housing and payment expenses should not exceed 39%. 

Lenders perform a mortgage stress test to determine if you qualify for the mortgage amount. Passing the test means you have a good debt ratio and may get the best mortgage rate in Calgary.

Raise Reasonable Amounts with a Down Payment

Lenders require homeowners to raise a down payment of 20% of the value of the home or purchase price if buying a home worth less than $1 million. 

Otherwise, the lender may charge a high mortgage rate. Some lenders require borrowers to purchase mortgage default insurance, resulting in a lower mortgage rate. 

The Type of Mortgage

The type of mortgage also affects the mortgage rate charged. If you’re refinancing the mortgage, the lender is likely to charge a high mortgage rate. 

The best rate can help you save thousands of dollars during the loan term. With the best mortgage rate in Calgary, you can keep monthly mortgage payments manageable, which is critical to living a comfortable life with a large debt.

Finding Calgary’s best mortgage rates isn’t a one-day affair. You must conduct thorough research, compare multiple options, and factor in your mortgage objectives. We provide a rough estimate of the mortgage rates charged by the five big lenders in Canada, but it would help to work with a Calgary mortgage broker when looking for a competitive mortgage rate.