Compare The Best Mortgage Rates In Edmonton

Your Guide To Getting The Best Mortgage Rates In Edmonton

When you’re on a quest to get the best mortgage rates Edmonton has to offer, comparemortgages.ca can help. You can completely depend on us to further  understand how to navigate mortgages. 

About Edmonton

Edmonton is the capital of Alberta and is located on the North Saskatchewan River. You would find the city’s past at Fort Edmonton Park, a living history museum featuring an 1846 fort and streets dating back to 1885, 1905, and 1920. Contemporary landmarks in the city include the Royal Alberta Museum with its natural-history and aboriginal-culture galleries and the Art Gallery of Alberta with its characteristic futuristic look, which is also renowned for its First Nations art. 

Edmonton is regarded as the “Gateway to the North” and has a population of 1,461,182. 

Compare Edmonton Mortgage Rates

Below is a table displaying the best rates from the five largest banks in the country. You can easily compare the rates offered by major Canadian lenders and banks, including TD Bank, RBC, CIBC, HSBC, and Scotiabank. We take care of the research to guarantee you the lowest possible rates upfront every time.

Compare Big Bank Rates In Edmonton

It can be time-consuming and frustrating to compare rates by yourself. With us, you can find everything you need in one convenient location. Also, ensure that you consider the mortgage product term length and type when comparing rates. For instance, if you are in the market for a fixed-rate mortgage, it is essential to examine the range of terms given by various banks, such as three-year and five-year offerings, and not just the interest rate.

About the Edmonton Housing Market

Single-family homes smashed previous records to reach a new record high of almost half a million dollars as of February 2022, which resulted, in part, from a higher number of houses selling for excess of a million dollars. However, as we go into 2023, the prices of homes are on a downward trend, which means affordable homes may come along. 

Edmonton closing costs

Every home journey includes closing costs. Including these expenses in your budget is essential because, more of than not, they would have to be paid separately from your mortgage payments. 

Closing costs differ depending on the property type you want to purchase; however, a ballpark estimate would be around 5% of the home purchase price. This is a solid amount that would cover these expenses. 

Typically, they range from 3% to 5% of the home’s price. Yet, it would be a good call to keep aside more money than you might need. You could use the excess to fix your new home or set it aside for maintenance costs. You really cannot end up saving too much.  

Edmonton first-time home buyer programs

Alberta has a good number of first-time homebuyer programs and incentives specifically to reduce the financial burden that first-time home buyers would have to deal with. In addition to offsetting some home purchase costs, these programs also aid in funding your down payment which is the most important aspect of buying your first home. 

Edmonton Mortgage Brokers

If you want to buy a home in Edmonton, it is best to speak with professionals when navigating mortgage rates in the city. Go right ahead to apply online, and in record time, one of our partners will help you identify the best product that works perfectly for your needs. 

What are the Different Types of Mortgages?

Open vs Closed Mortgage

An open mortgage allows for prepaying any amount of your mortgage at any given time without having to deal with a prepayment penalty. The trade-off for this flexibility that an open mortgage provides is the higher interest rate on your mortgage.

On the flip side, a closed mortgage has a lower and more attractive interest rate because the flexibility allowed in an open mortgage is missing here. Instead, there is a cap on the extra mortgage payment that you can make per year. This implies that you can only pay a specific percentage of your current or original balance annually – usually an average of 15%; however, there may be variations depending on the lender. If you are allowed to choose, ensure that you go for the option of original balance prepayment because it allows you to make more payments annually. Given that you would receive a prepayment penalty if you exceed your annual payment limit, it is essential to note these limits and remain within them.

Fixed Mortgages

With a fixed rate mortgage like the 5-year fixed mortgage rates in Edmonton, your interest rate stays unchanged through the entire term of your mortgage (1 to 10 years). In fact, the most common choice Canadian homeowners make is the five-year fixed-rate mortgage. However, despite its widespread popularity, this does not necessarily imply that it is the ideal one. Fixed-rate mortgages can be a good idea for conservative homebuyers working with a tight monthly budget or having their eyes set on a stable payment schedule. 

Variable interest rate mortgages

A variable interest rate sees fluctuations through the term, increases or decreases. If you opt for variable mortgage rates of the available mortgage rates in Edmonton 2023, you could end up with a lower rate than if you had opted for a fixed rate. 

There are two versions of variable interest rate mortgages:

  1. Variable rates with adjustable payments 
  2. Variable rates with fixed payments

Fixed payments with a variable interest rate

For this option, despite variations in interest rate, the payment on your mortgage in Edmonton remains the same over time. 

If there is a reduction in interest rate, more payment goes towards paying off the principal. This implies that your mortgage is being paid off faster.

If there is an increase in interest rate, the principal sees less payment going in its direction, while a bigger portion goes towards interest payment.

Finally, if market interest rates rise to a specific percentage or trigger point, your lender may increase your payments. This increment ensures that you can still repay your mortgage at the end of the amortization period. Your mortgage contract would have the specific trigger point highlighted.

Adjustable payments with a variable interest rate

True to their name, adjustable payments have payment amounts changing as interest rate changes. A fixed portion of the payment goes to the principal. As interest rates see changes, the portion going to interest sees a similar change. This way, you would be able to tell the portion of the principal you would have paid when the term of your mortgage ends.

What Affects My Mortgage Rate in Edmonton?

When trying to qualify for a low-interest rate in Edmonton, your income and credit score can play a significant role. The higher the risk involved in borrowing, the higher the interest rate could be.

Down Payment

How much you make as a down payment determines whether you would also have to pay mortgage default insurance alongside your recurring payments on your Edmonton mortgage. If you make a down payment of less than 20% of the property’s value, you must pay mortgage default insurance.

Amortization Period

If you select a longer amortization period (the maximum is 25 years on mortgages with less than a 20% down payment and 30 years on mortgages with down payments of 20% or higher), your individual mortgage payment will be lower because they’re spread out over a longer period of time. Longer amortizations can come equipped with higher interest rates. You’ll also pay more interest the longer you take to pay off your mortgage.

Property Usage

A primary residence, or an owner-occupied home, is one that you plan on living in and qualifies for the most desirable mortgage rates due to the lender’s assumption that you will prioritize payments on this property over any other investments. On the other hand, if you are looking to buy as an investment and turn it into a rental property, interest rates may be higher on account of a greater perceived risk by lenders.

Mortgage Type

Your mortgage rate would also be impacted by your choice of mortgage – such as open vs. closed or variable vs. fixed.

The choice of either option is personal and usually dependent on several factors. For instance, for open vs closed mortgages, you should note that open mortgages would feature a higher rate than closed mortgages due to the flexibility that borrowers enjoy since they can choose to pay off their mortgage anytime without facing a penalty. In the same vein, fixed-rate mortgages have steady payments but higher penalties on breaking your mortgage compared to variable-rate mortgages.

Your Credit Score

Borrowers with credit scores of 680 and above are regarded as the ideal candidate for a traditional mortgage lender. The higher the score above 700 is – with a maximum score of 900, the better the chances of getting the best rates.

How to Apply for a Mortgage in Edmonton

During your mortgage application process, you must provide various documentation, including proof of employment and income, proof of down payment, and documentation showing the state of your general finances, including debts and assets. 

Meet with a mortgage expert

Securing the services of a mortgage expert like the best mortgage broker in Edmonton to ensure that things are in your best interest while you navigate the overwhelming mortgage options available places you at an advantage relative to directly shopping with one lender or bank. 

Whether buying a home for the first time, doing an upgrade or refinancing/renewing an existing mortgage in Edmonton or purchasing an investment property or vacation home, mortgage experts always guarantee that you have access to the mortgage type that suits your needs and finances the most. They do this by comparing the various offerings from multiple lenders, including trust companies, credit unions, banks, and private and alternative funding specialists. In essence, your mortgage expert is an intermediary between the lender and you (the borrower).

Acquire all necessary documents.

Compiling as much documentation as possible before having a chat with your mortgage expert can aid in getting a preapproval or even the final mortgage approval. 

The necessary documents include: 

  • Proof of Identity 
  • Employment Verification
  • Income Verification 
  • Proof of Assets
  • Confirmation of Down Payment
  • List of Debts/Liabilities
  • Purchase and Sale Agreement 
  • Real Estate Listing
  • Credit Report
  • Mortgage Insurance Information
  • Appraisal Report
  • Property Insurance 
  • Legal Representation 
  • Survey of Property

Apply for mortgage financing

When you have all of this documentation available, your mortgage expert would help identify the best mortgage lenders that would work great for your needs and then hand in your application to be approved.

Sign & finalize your mortgage

Before your mortgage closing date, you would have to review and sign the final mortgage Edmonton documents with your real estate lawyer present to confirm that financing has been secured and is available when you assume ownership of your new home.

Learn About Rates & Mortgages In Edmonton

Our Frequently Asked Questions (FAQ) section is here to help you make educated decisions on the best mortgage rates in Edmonton every time.

Why compare Edmonton mortgage rates on comparemortgages.ca?

Comparing Edmonton mortgage rates on comparemortagges.ca guarantees that you will always have access to the most current mortgage rates in Edmonton, which can help you save money all throughout your time as a homeowner.

Should I get a fixed-rate or variable-rate mortgage in Edmonton?

The choice of whether to opt for a variable-rate or fixed-rate mortgage, like the 5-year fixed mortgage rates in Edmonton, is dependent on your comfort level and the risk that you can handle.  

If you need to know the specific amount you would be paying towards your mortgage in Edmonton every month, then a fixed rate would work, given that payments are unchanging. 

A fixed rate would not experience rate increments for the duration of the term that you have chosen (1-10 years). Fixed-rate mortgages like the 5-year fixed mortgage rates in Edmonton appear very attractive to homebuyers who are generally more conservative or want a predictable payment schedule. Homeowners on a tight budget opt for a fixed rate since it allows them to plan. 

Variable-rate mortgages undergo fluctuations with the lender’s prime rate throughout your mortgage term. An increase or decrease in the prime rate would impact what portion of the principal you pay off monthly. When rates decrease, a larger portion of your payment goes towards paying off the principal. Similarly, when rates go up, a bigger portion of your payment covers the interest portion of your mortgage. 

Are Edmonton mortgage rates higher than other cities?

Today’s mortgage rates in Edmonton depend on the lender or bank offering each product (see chart). Thanks to our advanced technology, we can have an accurate overview of the market at any point in time, guaranteeing that you would always have access to the most up-to-date mortgage rates in Edmonton information which would help you make better decisions about whether to leave your rates be or lock it in.