Best Alberta 5-year fixed mortgage rates
Who has the best mortgage rates in Alberta?
No single bank has the best mortgage rates in Alberta at all times. Every mortgage provider sets its own mortgage rates based on the market, its target customer, as well as its expansion plans. Even for the same mortgage term and rate type, competing providers can vary wildly on their mortgage rates. These factors can change over time, so you'll often see lenders going back and forth between offering the best mortgage rate. The best way to get the best mortgage rate on the market is to compare the rates that banks and other lenders are currently offering. You can do that with the tools at the top of this page.
What is a 5-year fixed mortgage rate?
A 5-year fixed mortgage rate is a lending rate that is set for a 5-year term, so it won't change even if prime rates rise. The alternative to fixed rates - variable rates - will fluctuate over time. That makes fixed rates much more stable and easier to budget for. As for the term length, 5-year terms are the most common mortgage term length in Canada and are a nice compromise between short-term flexibility and long-term stability.
How much can I save comparing 5-year fixed rates?
Because mortgages tend to be very large loans, even a slightly lower interest rate can result in major changes to your mortgage payments. For example, on a $500,000 mortgage with a 25-year amortization period, a rate of 3.00% would see you pay $69,347 interest over 5 years. With a 2.75% rate you’d pay $63,454 interest over the term. So, a difference of just 0.25% can save you $5,893 over your 5-year term. Check our mortgage payment calculator to run your own numbers. Because comparing mortgage rates between different lenders is one of the best ways to get a lower rate, it's definitely worth your time. You can do this for free with the tools at the top of this page.
Will mortgage rates go up or down this year?
It's generally very hard to predict if mortgage rates will go up or down over the medium to long term, and even short-term changes can be unpredictable. To predict if mortgage rates will go up or down this year, you have to take into account several factors, including the economy, the Bank of Canada rate, as well as trends in the mortgage industry. You can learn more about whether rates will go up or down here.
In 2022, however, we have seen that mortgage rates have been steadily rising in tandem with the Bank of Canada's successive rate hikes. Many experts believe that rates will continue to rise in the end of 2022 and into 2023 before levelling off and potentially coming down in 2024.
What happens after a 5-year fixed mortgage?
When your 5-year fixed mortgage comes to an end, you'll need to renew it. Your current lender will likely send you a renewal slip with a renew offer on it that you simply need to sign and return to them. You should never accept this offer right away. These automatic renewal offers tend to be very overpriced. Instead, when you are coming up for renewal you should get in touch with multiple other lenders and mortgage brokers to see if there are any better deals that you could be eligible for. Switching providers at renewal time is generally cheap and easy, so it's worth the effort to find a potential saving.
Are 5-year mortgages better than other mortgage terms?
A 5-year mortgage term isn't necessarily better or worse than other term lengths, but it does represent a good compromise between flexibility and stability. A shorter mortgage term, like a 2 or 3-year term, is naturally more flexible, as your mortgage renewal will come up sooner. However, a long mortgage term with a fixed rate can lock in a competitive rate for up to 10 years. Which mortgage term to choose really comes down to your needs, as well as the current mortgage rate environment.
Compare current mortgage rates across the Big 5 Banks and top Canadian lenders. Take 2 minutes to answer a few questions and discover the lowest rates available to you.
Best fixed rate in Canadasee my rates
Jamie David, Sr. Director of Marketing and Mortgages
Getting a mortgage is always a big commitment, no matter where you are in Canada. For Albertans, whether you live in a big city like Calgary or Edmonton or a smaller centre like Red Deer, Canmore or Medicine Hat, your mortgage will still probably be the biggest financial commitment you ever make.
With that in mind, you'll want to make sure you're getting the right mortgage for you, with an appropriate term and rate type. 5-year fixed-rate mortgages are the most common mortgage type in Alberta, as well as across the rest of Canada, so they're the obvious place to start when comparing mortgages. That's not to say they're always the right mortgage to go with, though!
Read on to learn more about 5-year fixed mortgage rates in Alberta and to decide whether they might be a good fit for you. Once you're ready to take the next step, use the tools at the top of this page to receive quotes from multiple mortgage providers for free.
Best mortgage rates in Alberta +
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Alberta 5-year fixed mortgage rates: Quick facts
- ~80% of mortgages in Calgary and Edmonton have fixed mortgage rates
- 88% of Alberta mortgages outside Calgary and Edmonton have fixed mortgage rates
- 60% of all mortgages closed with Ratehub.ca in 2020 were 5-year fixed mortgages
- 72% of Canadians had fixed mortgage rates in 2020 (Source: Mortgage Professionals Canada)
- 5-year mortgage rates are driven by 5-year government bond yields
Historical 5-year fixed mortgage rates in Alberta
One of the most important factors in choosing whether to go for a long or short mortgage term or with fixed or variable mortgage rates is the current rate environment. If rates are rising, it makes more sense to look for a fixed-rate mortgage with a longer term, which lets you lock in today's lower rate for longer. Conversely, if rates are going down, a variable rate will let you benefit from a lower prime rate in the future.
While there are many reasons why rates may go up or down, a quick way to tell if rates are likely to rise or fall is to see where today's rates compare to historical rates. Here are the lowest 5-year fixed rates in Canada for the last several years, compared to several other types of mortgage rates.
Source: Ratehub Historical Rate Chart
The popularity of 5-year fixed mortgage rates in Alberta
5-year mortgage rates are the most popular in both Alberta and across Canada for a reason. They sit in the middle of the most widely available mortgage term lengths (1 to 10 years) so they offer a balance of long term stability (with a fixed rate) and flexibility to change to a different mortgage type or provider in the short term. 60% of all mortgages closed with Ratehub.ca in 2020 were 5-year fixed mortgage terms, which speaks to their place as a kind of "Swiss Army Knife" of mortgages.
Fixed rates are also more popular than the alternative option, variable rates. This is because, while variable rates can often be cheaper over time, fixed rates offer a level of certainty that variable rates cannot. With a fixed rate, you'll know exactly how much your mortgage payments will be each month, which is easier to budget for.
Something fascinating about Calgary and Edmonton, in particular, is that fixed rates are a lot more popular than they are in other Canadian capitals. While ~80% of urban Albertans have fixed-rate mortgages, only 65% of people in Vancouver and 68% of people in Toronto and Ottawa have fixed-rate mortgages.
This could be for many reasons. Albertan economies may rely more heavily on particular industries, or people in Edmonton and Calgary may move homes less often. Whatever the reason, the popularity of fixed rates in Alberta could be seen as a vote of confidence in the product.
During a long period of low mortgage rates, you'll often see the proportion of fixed-rate mortgages increase, as more borrowers lock in low rates for the long term.
What drives changes in 5-year fixed mortgage rates?
By and large, 5-year fixed mortgage rates follow the pattern of 5-year Canada Bond Yields, plus a spread. Bond yields are driven by economic factors such as unemployment, export and inflation.
When Canada Bond Yields rise, sourcing capital to fund mortgages becomes more costly for mortgage lenders and their profit is reduced unless they raise mortgage rates. The reverse is true when market conditions are good.
In terms of the spread between the mortgage rates and the bond yields, mortgage lenders set this based on their desired market share, competition, marketing strategy and general credit market conditions.
5-year fixed rates vs. 5-year bond yields (interactive chart)
Should you get a 5-year fixed-rate mortgage in Alberta?
The truth is, you need to decide for yourself whether you want to take out a 5-year fixed-rate mortgage. The best way to get a great deal is to learn as much as you can about Canadian mortgages (which you're doing right now!) as well as comparing mortgage rates between multiple lenders, which you can do for free with the tools at the top of this page. If you're still not sure about what mortgage product best suits your needs, it's a good idea to speak to a mortgage broker. Consultations are free, and you'll leave with expert advice, personalized to you.
Jamie David, Director of Marketing and Head of Mortgages
Jamie has 15+ years of business and marketing experience. She contributes her mortgage expertise to The Globe and Mail and authors Ratehub’s mortgage and homebuying guides. read full bio