Why now might be a good time to be a first-time home buyer in Alberta

Mortgage rules and rates: What to know about buying real estate in Alberta

The mortgage rules in Alberta are the same as they are in other parts of the country. Why’s that? Canadian mortgage rules are based on the lender you deal with—not where in Canada you buy your home. 

Federally regulated financial institutions, including banks and federal credit unions, must follow rules set by Canada’s banking regulator, Office of the Superintendent of Financial Institutions (OFSI). A first-time home buyer in Alberta obtaining a mortgage from one of these institutions will face the same down payment, mortgage qualification and mortgage stress test rules as any other Canadian buyer using the same kind of lender. 

In Alberta, you can also get a mortgage from a provincially regulated institution, such as credit unions and loan and trust companies incorporated in the province. These institutions may use different, but similar criteria around mortgage lending. For example, provincial lenders aren’t required to apply the federal mortgage stress test, though many still do. 

Know that even among similar lenders, mortgage rates can vary slightly by province, because competition among providers can help lower rates. In Alberta, there are many different mortgage providers to choose from, giving first-time home buyers the opportunity to find a good interest rate on their mortgage. 

For more on the home-buying process, read our complete guide for first-time-home buyers. 

First-time home buyer incentives in Alberta

Mortgage rates aren’t the only thing to consider when buying a home in Alberta. First-time home buyers can also benefit from getting to know the home buying incentives and initiatives available in the province. Here’s a quick overview of what’s available uniquely to Albertans. 

Attainable Homes Calgary

Attainable Homes Calgary (AHC) is a non-profit program started by the City of Calgary to help middle-income families achieve the dream of homeownership. It was created to address the difficulty this demographic has in saving for a down payment while also paying for other expenses, like rent and other bills.

Through AHC, Calgarians are able to get a home with a down payment of as little as $2,000. The program loans eligible buyers the remaining 5% of the purchase price needed for their down payment. And the loan is interest-free, meaning you won’t pay a dime of interest on it.

Here are some other important facts to know about the program:

• There’s a limit on qualifying income. If you are buying on your own (no dependents), your annual income must be less than $84,000. If you are buying as a couple (no dependents), your combined annual income must be less than $94,000. And if you are buying on your own or as a couple with dependents, you must make less than a combined $104,000, annually.
• AHC remains on title as a co-owner and shares in the appreciation of the property, until you sell or repay the money borrowed. AHC’s share in the appreciation of the property diminishes the longer you are in the home, to a minimum of 25% of its value. 
• You still need to qualify for a mortgage, and you can do so with a co-signer.   

The First Place Program in Edmonton

Since 2016, Edmonton’s First Place Program has worked with banks and builders to transform some of the city’s surplus school building sites into townhomes.

On top of constructing the home itself, the cost of acquiring land can be expensive for many first-time buyers. The First Place Program helps home buyers defer the land portion of their mortgage for up to five years. Buyers must still pay for the townhome itself, as well maintenance fees, taxes and utilities. 

To be eligible for this program, you must meet the following criteria:

• Be a first-time home buyer in Alberta
• Have a down payment of at least 5%
• Have a personal net worth of $25,000 or less (excluding a primary vehicle, RRSPs and mortgage down payment)
• Have a household income of less than $117,000
• Be pre-approved for a mortgage
• Be a Canadian citizen or permanent resident
• Live in the unit full-time for the first five years

Is now a good time to buy real estate in Alberta? 

After learning about Alberta mortgage rules, rates and home buying programs, you may be wondering, is now even a good time to buy a home in the sunshine province? Rising interest rates are having a real impact on the Canadian real estate market this year, and Alberta is no exception.

In February 2022, Alberta real estate markets were breaking records. For example, in Edmonton, the price of a single-family home approached $500,000, up from $428,000 the year before. The number of real estate sales jumped almost 42% over the same timeframe. Similarly, the real estate market was very hot in Calgary, with the benchmark home price reaching $484,000 in February 2022.  

In the province’s two largest cities, homes remain very affordable compared to the national average, making them a good fit for many first-time home buyers. The pace of recent price gains may have made it harder for many first-time buyers to get into the market, but that trend is starting to reverse itself. As of August 2022, rising interest rates have slowed the pace of sales and price growth in cities like Edmonton and Calgary. 

First-time home buyers will still have to contend with higher interest rates and what those mean for their mortgages. Affording your first home means being able to cover the monthly costs of your mortgage, in addition to saving a substantial down payment. 

Read more about real estate: 

• What it’s like to be a first-time home buyer in Ontario—for real
• Want to become a first-time home buyer in B.C.? These three steps can help
• 7 smart strategies for first-time home buyers
• Top 10 mistakes first-time home buyers make

About Sean Cooper

Sean Cooper is a personal finance journalist and mortgage broker in Toronto. His articles have been featured in publications such as the Toronto Star, Globe and Mail and Tangerine’s Forward Thinking blog.

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