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Average Mortgage Payments in Calgary

Jessica Lyn

Calgary has seen an increase in average home prices since 2015 but still remains below the national average. According to the Canadian Real Estate Association (CREA), the average home price in Calgary is $468,659.

The average home price in Canada increased by 7.3% from the previous year and currently sits at $489,591. With average homes in Calgary priced below the national average, you may wonder what the mortgage payment is if you purchase a home in Calgary.

In order to calculate the average mortgage payment, a few additional details are required (including the down payment, mortgage rate, amortization period, and payment frequency).

Down payment

Since the average price of a home in Calgary is below $500,000, the minimum down payment calculation is relatively simple (5% of the home price). Therefore, the minimum down payment on a $468,659 home is $23,433.

However, if you’re interested in purchasing a home that costs more than $500,000 but is less than $1 million, the minimum down payment is 10% of the portion of the home’s price above $500,000 plus 5% of $500,000 (which is $25,000). The formula is: minimum down payment = (house price – $500,000) + $25,000

If the home price is $1 million or more, the minimum down payment is 20% of the home price. The formula is:
minimum down payment = home price x 20%

Mortgage rate

Aside from searching for your home, searching for the best mortgage rate is one of the most important tasks you can do. Your mortgage rate determines how much interest you’ll pay on your mortgage. Securing the lowest rate will ensure you pay the least amount of interest on your mortgage. Having a low mortgage rate can save thousands of dollars over the life of your mortgage.

There are two common types of mortgages. With a fixed-rate mortgage, your mortgage payments will always be the same amount as your mortgage rate stays constant throughout the term. However, with a variable-rate mortgage, your mortgage payments will vary as your rate will fluctuate with the prime rate. This is because variable rates are dependent on the prime rate. When the prime rate increases or decreases so will your variable rate, which will affect how large your mortgage payment is.

In addition to deciding between a fixed and a variable mortgage, you’ll also have to select the term. The term can span multiple years with the most common being five years. To calculate the average mortgage payment in Calgary, we’ll use the best five-year fixed rate currently on the market (2.44%) as of Jan. 12, 2017.

Amortization period
The amortization period is the length of time it will take to pay off your mortgage. This time period is different from your mortgage term as your mortgage term is how long you have locked in your mortgage rate. Your amortization period is typically a lot longer than your mortgage term, which is typically five years. Amortization periods are typically between 10 and 30 years with the most popular term for new mortgages being 25 years. We’ll use 25 years for our calculation.

Payment frequency
The payment frequency is how often you make your mortgage payment. The typical frequencies are monthly, bi-weekly, and accelerated bi-weekly. To calculate the average mortgage payment in Calgary, we’ll use a monthly payment.

Mortgage payment
For this example, the minimum down payment on a $468,659 home is $23,433, the five-year fixed mortgage rate is 2.44%, there’s a 25-year amortization period, and mortgage payments will be monthly. Now we can use a mortgage payment calculator to determine the mortgage payment. The average monthly mortgage payment for a $468,659 home in Calgary is $2,053. For the average home in Canada, the monthly mortgage payment is $2,144 and requires a down payment of $24,480.

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