Home Buying and Mortgages

Your complete guide to buying a home in Alberta

Are you looking at buying your first home (or maybe third or fifth home)? Buying a home is a huge milestone—and the home buying process can sometimes be just as confusing and overwhelming as it is exciting.

That’s where we come in. We’ve collected information about buying a home from industry experts so that you can feel confident in the process. Here we’ll take you through a step-by-step guide on what you need to know (and do!) when buying a home in Alberta.

Am I ready to buy a house?

So, you’ve started to ask yourself—am I ready to buy a house? 

This is a very important question because purchasing a home is one of the biggest financial decisions you will make in your lifetime. To help guide you, we’ve compiled the top signs that you are ready to sign mortgage papers.


7 signs that you’re ready to buy a home

  1. You have a specific area that you can see yourself staying for the long term.

  2. You have at least a loose idea of what your future will look like (the things you can control) and how your current lifestyle will likely shift in the next 10-15 years.

  3. Your current home can’t meet your long-term vision and needs.

  4. You’re in a comfortable financial position, with a manageable amount of debt and you’re satisfied with your retirement savings up until now.

  5. You’ve accepted and prepared for the extra costs of being a homeowner.

  6. If you experienced a career shakeup, you could still cover your mortgage and other house expenses without dramatically increasing your debt.

  7. You feel like it makes sense to pay towards a mortgage instead of rent every month.

Home buying readiness: Yes or No?

Three things you’ll need to decide before you buy a home.

It’s a common question, and a good one! Sometimes it just might not be the best time to take the leap into home ownership. But you don’t have to guess if you’re ready or not—try out our rent vs. own calculator. Take into account the mortgage rate, market value of the home, and potential rate of return you’d get from investing your extra cash instead of putting it towards a mortgage to help you move farther along in your decision.

What do you think? If you’re feeling pretty confident, we think that you should continue to learn more about buying a home and find answers to more of your questions. We’ve actually created a home buying guide, created specifically for first time home buyers to navigate how to buy a home in Alberta. Download it for free and keep it on hand as you continue your research.

Which is better to buy, a house or a condo? Well, neither is necessarily “right” or “wrong,” but one of them could be the best fit for you. Check out the comparison between the perks and pain points of living in a house versus a condo.

Pros of buying a house:

  • Detached houses (and the land they sit on) tend to appreciate in value over time.
  • You are able to change and renovate a house as dramatically as you’d like.
  • A yard provides personal space to enjoy the outdoors and grow a garden during the summer months.
  • Houses allow you more flexibility to have pets.
  • Houses often have more parking space on the property than you might be given in a condo parkade.

Cons of buying a house:

  • Maintaining a yard may mean spending time, energy and money on lawn mowing, tree trimming, landscaping, etc. And you’ll have to shovel the snow off the sidewalks and driveway during the winter.
  • Insurance on a house is often more expensive than on a condo.

Pros of buying a condo:

  • Yard work and snow clearing on the property is taken care of by the condo board.
  • Condo fees usually include some utilities and can be considerably less than the costs associated with owning a detached house.
  • Condo fees are predictable, typically only changing on an annual basis, rather than fluctuating month-to-month like house expenses do.
  • Insurance on a condo is more like renter’s insurance: less-expensive insurance on contents rather than the structure itself.
  • Condos often have party rooms, workout rooms, swimming pools—sometimes even guest rooms.

Cons of buying a condo:

  • Any major renovations to your condo must be approved by the condo board first.
  • The resale value of a condo often starts to decline after the ten-year mark.
  • Condo facilities (party rooms, gyms, swimming pools) are public to all condo residents and may not offer the level of privacy you desire.
  • Some condo buildings are adult-only and some don’t allow pets.
  • Condos may limit the amount of parking space available to you, and often cannot accommodate large recreational vehicles.

It’s a valid question. Here are some pros and cons of each to help you weigh your decision when purchasing a house.

The pros of buying new:

  • The luxury of simply turning the key and walking in—no need for renovations, maintenance or repairs up-front.
  • New homes come with warranties. As of February 1, 2014, every new home in Alberta is protected under warranty by one of seven government-approved warranty providers. Coverage extends for 1-10 years.
  • New homes are subject to more stringent and comprehensive building codes, and thus may be safer and more energy-efficient.
  • Buying a new house comes with the opportunity to personalize your home, from paint and countertop colours to green technology like solar panels and energy-efficient hot water heaters.
  • There’s a smaller chance of being involved in a bidding war for a new house than for a resale.

The cons of buying new:

  • GST and HST apply to the price of a new home.
  • Unless you’re buying an infill build, a brand-new home will likely be in a brand-new neighbourhood, often in a suburb with undeveloped character and culture.
  • New homes are often built with cheaper materials and may not last as long.
  • Buying a new home before it’s actually built comes with the potential for delays that can cause stress around the move-in date.

Pros of buying a resale:

  • GST and HST are not applied to the price of pre-owned homes.
  • Resale homes are often located in established neighbourhoods with developed character and culture.
  • Older homes are often built with solid wood, copper pipes, a more substantial foundation, etc., and tend to last longer as a result.

Cons of buying a resale

  • You may have to pay for renovations, maintenance, or repairs on the home to personalize it to your lifestyle.
  • Older homes were often built under older, less comprehensive building codes, and thus may be less energy-efficient.
  • There’s a higher chance of being involved in a bidding war for a resale than for a new house.

Want to know more about buying new vs. resale?

Check out our home buying guide—we’ve built an interactive home buying checklist and scoring system to help you prepare.

Determining the right neighbourhood.

Another important decision you’ll need to make when purchasing a home is where you want to live. Is being close to the river valley in Edmonton important to you or do you want a short work commute to downtown Calgary?

Some of your neighbourhood wants could include:

  • Schools
  • Shopping
  • Proximity to work, family or friends (or all three!)
  • Parks or nature trails

Once you’ve confirmed your list, take a look at a couple neighbourhoods you’re considering and see what boxes they check. If you find they’re not checking the boxes, you might want to expand your search.

Saving for a mortgage down payment.

How to start saving for a house.

Deciding when to start saving for a home is a no brainer, the big decision is when to stop saving for a down payment. The terms or your mortgage and interest rate is in part determined by the size of your down payment, and it’s a safe bet that a large down payment is going to save you money in the long run.

Speaking to a mortgage specialist will help you determine how much you should save for a down payment while still maintaining your desired lifestyle. On top of programs, like the Home Buyer’s Plan, creative savings strategies can help you get closer to that down payment savings goal without sacrificing your quality of life.


5 tips to save up for a down payment

  1. Prioritize your spending: figuring out what are “wants” and what are “needs” can do wonders for your spending—and saving! If you prioritize saving for a house over that golf trip or designer bag, you’ll be well on your way.
  2. Pare down your material goods: when you learn to live with less, the need to always buy more decreases. Hear us out—we’re not saying that you have to eliminate everything you enjoy. We’re saying that you’ll be able to focus more on what you care about most when it doesn’t get lost in a sea of clutter. Plus, you’ll set yourself up with a mindset that doesn’t default to impulse buys and hoarding.
  3. Earn extra income: this is the time to get a side hustle, and put all of the extra earnings towards your down payment. Offer lawn care in your local area on weekends, sell your artistic creations, babysit for the neighbours. You’ll be thanking yourself for putting in the extra work when you get the keys to your new place.
  4. Pay off your credit card debts first: you don’t want to save up for a down payment with money that you don’t actually have. Once you’ve paid off your credit card debt, then you’ll see what you have to work with.
  5. Use the Government of Canada’s Home Buyers’ Plan (HBP): if you’re a first time home buyer, you can withdraw up to $35,000 from your RRSP, tax-free to put towards your down payment (more information about the HBP included below).
  6. Open a First Home Savings Account: The First Home Savings Account (FHSA) is a plan that helps eligible Canadians save for their first home tax-free by combining certain features of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA). You can invest up to $8,000 a year (with a lifetime maximum limit of $40,000) in an FHSA towards the purchase of a first home.

Mortgage terms explained.

Open mortgages, closed mortgages, variable mortgages, oh my! All of the mortgage terms out there are enough to make your head spin. That’s why we wanted to give you an overview of some mortgage terminology, to help you make sense of this sometimes confusing language. Here are some mortgage terms you need to know:

  • Insured mortgage: if you’re making a down payment of less than 20% of the price of the home, then you'll have to have mortgage default insurance. This protects the mortgage provider who’s providing a loan without the security of a substantial down payment.
  • Conventional (Uninsured) mortgage: if you’re making a down payment of more than 20% of the price of the home, then your mortgage doesn’t require mortgage default insurance.
  • Variable mortgage: the interest rate fluctuates with the Bank of Canada’s prime lending rate.
  • Fixed rate mortgage: fixed-rate mortgages guarantee a fixed interest rate for the length of your term.
  • Closed mortgage: a closed mortgage can’t be repaid without prepayment penalties during its term, except if there are exceptions in the mortgage agreement.
  • Open mortgage: an open mortgage allows repayment of your mortgage at any time, without penalty, but typically has higher rates.
  • Amortization period: the length of time over which you expect you pay off your mortgage. It typically ranges from 15-25 years.
  • Mortgage term: your term is the amount of time that you’re committed to your mortgage provider, interest rate and payment options. At the end of your term, you can choose to either renew your mortgage under the same conditions but at a new interest rate based on the current market, renegotiate your mortgage with the same provider or move your mortgage to a different provider.

For more mortgage related terms, read ‘6 mortgage terms you need to know’.

Mortgage Finder Calculator: what mortgage should you get?

Want a little help applying all of those mortgage definitions to find the right mortgage for you? Use our mortgage finder calculator to figure out your best mortgage option based on your mortgage needs, risk tolerance and payment preferences.

Just keep in mind that while this calculator is a helpful tool, to really understand what works best in your life, we recommend going over your options and long-term financial goals with a mortgage specialist.

Mortgage pre-approval process explained.

“Will I get approved for a mortgage once I’m pre-approved?”

“How do I get pre-approved for a mortgage?”

These are normal questions that surround the seemingly intricate process of pre-approval. Here are some things you should know about mortgage pre-qualification and pre-approval:


First thing’s first—mortgage pre-qualification and mortgage pre-approval are not the same thing.

They do sound similar, so we understand it can be confusing. Now that we’ve got that out of the way, let’s define the two.

Pre-qualification is the first step to pre-approval. It helps you and your mortgage provider determine approximately how much you’ll be able to borrow and how much you’ll need for a down payment and closing costs.

The mortgage provider won’t review your credit report or verify your financial information when going through the pre-qualification process. Rather, they’ll estimate how much you might eventually be approved for based on an overview of your finances, including your income, assets and debts.

Mortgage pre-approval isn’t an all-out guarantee that a mortgage provider will actually fund your loan, but it’s as close to an all-out guarantee as you’ll get. It’s a smart move to get pre-approved before you start seriously shopping to buy a home.

Really, all pre-approval means is that a mortgage provider does some of the initial background checking in advance and commits to giving you a particular interest rate if you’re fully approved for a mortgage within 90 days.

To learn more about the mortgage approval process, read ‘6 things you need to know about mortgage pre-qualification and pre-approval’.

Mortgage affordability: what size mortgage do I qualify for?

In general, your credit score and the size of your down payment affect the interest rate a mortgage provider will offer you. If you have a low credit score (under 700 on a scale between 300 and 900), the down payment required by the lender to qualify for a mortgage may be more than if you had a higher credit score.


The mortgage you qualify for is based on:

  • Your ability to afford monthly mortgage payments.
  • How much confidence a mortgage provider has in your credit based on your credit score, which in turn affects the interest rate that provider is willing to offer you.
  • The size of your down payment, which is directly related to the size of the loan you’ll be taking out on the remaining portion of the property’s sale price.

You should be able to make all of your necessary monthly payments, including mortgage payments, with up to 50 percent of your total monthly income (this calculation follows the 50:30:20 rule that divides your budget into needs, wants and goals).

50:30:20 rule

Making a budget: key to figuring out the size of mortgage payments you can afford

While it may seem simple, making a budget is actually one of the first steps you can take to see how much you can afford to spend on monthly mortgage payments, once you factor in your other monthly expenses.

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Mortgage rates.

How are mortgage rates calculated?

Mortgage interest rates are determined by the prime rate in Canada. The prime rate is a target lending rate that’s used by banks to set interest rates for variable loans, lines of credit and mortgages. The rate is individually set by each financial institution, but when the prime rate is moved by one financial institution, others tend to follow and use the same rate within a day or two.

Who sets the prime rate?

The prime rate tends to be set based on what the Bank of Canada (BoC) sets their overnight target rate at. The BoC overnight target rate is the variable rate at which banks borrow money from the BoC.

How does the prime rate affect the rate I get on my mortgage?

The final rate that you’ll see can be influenced by quite a few things, like how a bank’s loan and mortgage growth is doing, whether it’s secured, and your credit history. In a competitive environment when loan growth may be slowing, you’re likely to see prime plus a smaller percentage, giving a better rate to the borrower. In some cases, you might see prime minus a percentage if the loan is secured.

Want to dive in deeper to how the mortgage interest rate is calculated? Read this article, where we explore how the prime rate is set and the impact it has on mortgage rates.

Mortgage calculator.

If you’re wondering what size of mortgage you can afford, how big your monthly mortgage payment would be, or maybe which mortgage type is right for you, we’ve got you covered with all kinds of mortgage calculator options.

  • Mortgage payment calculator: figure out how much your mortgage payment will be on all kinds of different payment schedules.
  • Maximum mortgage calculator: ​calculate the monthly mortgage payment you can afford using basic info like income, monthly payments, and down payment.
  • Mortgage comparison calculator: torn between a few mortgage options? Use this tool to compare different mortgages side by side and find the best fit for you.
  • Mortgage prepayment calculator: calculate the prepayment penalty you should consider before making additional payments beyond your mortgage contract. For example, lump sum payments or paying in full before the end of your term.

Feeling a little confused by the whole mortgage prepayment thing? We’ve got you covered. Here’s an article that explains prepayment penalties.

Should you get a variable or fixed mortgage rate?

Variable and fixed-rate mortgages are the two primary types of mortgages in Canada. Each has its advantages, but deciding which will work best for you can be tricky. Here are some key differences to keep in mind.

Variable mortgage vs. Fixed-rate mortgage

Variable mortgage Fixed-rate mortgage
  • Interest on a variable-rate mortgage fluctuates with the Bank of Canada’s prime lending rate.
  • Monthly payments on variable-rate mortgages remain steady over the course of your term. What varies is the percentage of your payment that goes toward the principal of the loan, versus the percentage that goes toward interest.
  • A disadvantage of a variable-rate mortgage is the risk of your mortgage payments increasing if your payments no longer cover the required interest*.
  • Variable-rate mortgages are usually cheaper over the long run.
  • Fixed-rate mortgages guarantee a fixed interest rate for the length of your term.
  • The way your monthly payment is divided between interest and principal stays the same.
  • A fixed-rate mortgage allows you to protect yourself from payment increases in the unlikely event that interest rates skyrocket so high that your monthly payment is no longer sufficient to cover your interest charges.
  • The primary disadvantage of a fixed-rate mortgage is the higher overall cost you’re likely to pay in the long run.

*If you have a variable-rate mortgage and the market is making you nervous, some variable-rate mortgages allow you to lock back in to a fixed rate with no penalty.

Do I need mortgage insurance?

Torn between mortgage insurance and life insurance? Totally understandable! Here’s a breakdown of some of the key differences to help you figure out what’s the best fit for you.

The key differences between:

Mortgage creditor insurance Coverage through term life insurance
  • Mortgage creditor insurance doesn’t typically require a medical exam.
  • You can select disability insurance as well.
  • A life insurance payout (benefit) goes directly to the bank to pay off your mortgage, leaving other insurance policies to be used by your family.
  • The premiums (payments) on most mortgage creditor insurance policies will renew and reset upon every mortgage renewal date, as long as you stay with the same mortgage provider your creditor insurance will remain in place.
  • Your premiums may increase based on your age, however, they will be updated using the lower mortgage amount that is remaining and you won’t need to renew or re-qualify.
  • If you refinance your mortgage with a higher amount you will need to re-qualify.
  • You can get mortgage creditor insurance when you first buy a house, and then cancel it later if you decide you would prefer a separate policy.
  • Life insurance through a term policy is based on you and your medical health only.
  • You can select the amount of coverage payout.
  • Changing employer or financial provider will not affect your policy.
  • You can select a separate disability policy to pay you a monthly income if you’re unable to work due to a disability. You have choices in the amount, waiting period and length of time it will be paid. Cost will be dependent on your choices.
  • A life insurance payout (benefit) remains constant—it doesn’t decrease over the term of your policy.
  • Life insurance is negotiated for a specific term and must be renegotiated at the end of that term.
  • Life insurance can protect anything you want. Your mortgage, other debts, your final tax bill, your children’s education and care, income replacement and more.

What you need to know about the Home Buyer’s Plan.

The Government of Canada’s Home Buyers’ Plan (HBP) allows first-time home buyers (and those considered first-time home buyers) to withdraw up to $35,000 from your RRSP, tax-free.

Short answer, yes! You have to repay the funds that you withdraw back into your RRSP (or have the required repayment added to your taxable income).

You’ll pay back your HBP when you do your taxes every year—you’ll allocate the money you repay into your RRSP either towards the HBP or your RRSP.

The repayment period starts the second year after you withdraw your funds from your RRSP. So, if you took the money out in 2020, you’ll start your repayment in 2022. You have 15 years to repay to your RRSP. You can choose to start your repayments earlier, but your repayment period will not change.  

For more information, check out what the Government of Canada has to say.

No, you’ll need to put 100% of your withdrawn RRSP funds towards buying or building a home that will be your primary residence.

You’ll have to buy or build your new home before October 1 of the year following your withdrawal year, so keep that in mind when planning when to take your RRSP funds out.

Still have more questions about the Home Buyer’s Plan? Find more answers in this article on using your RRSP to buy your first home.

The basics of making an offer on a house.

Did you know that there are two different types of offers you can make when purchasing a house? Here’s a breakdown of the two.


Conditional offer

  • Most offers are conditional offers pending home inspection and final approval of the buyer’s mortgage. Other conditions may also be applied.
  • With a conditional offer, if any of the stated conditions can’t be met, the buyer gets their full deposit back.
  • Some real estate contracts will also have a 48-hour clause to remove all conditions if another offer is received. This is seen mainly when the offer is subject to the sale of the buyer’s existing house.

Unconditional offer

Unconditional offers are both rare and risky. With an unconditional offer, if anything happens to compromise the deal before it closes, the buyer loses their deposit.


What happens after you make an offer on a home? Read through the rest of the process (and everything else you’d want to know about the home buying process) in our home buying guide.

Why home buyers need a lawyer.

Yes. Unlike in some other provinces, where a notary is sufficient legal authority to oversee property transfers, in Alberta it’s mandatory to work with a lawyer when buying a home.

In the most basic terms, a lawyer ensures the transfer of land from the seller to the buyer is legally enforceable and binding. It’s the lawyer who takes on some of the risk you might otherwise assume.

It’s a lawyer’s job to protect both the buyer and the seller from the time the offer is made until the time the deal is done. After the home inspection is passed, the lawyer initiates the two-week process for registering the transfer of land.

One of the documents the lawyer will send you is called a Statement of Adjustments. This document summarizes (among other things) the total property tax owed for the year, the percentage of the property tax that the seller is responsible for and the percentage of the property tax you, the buyer, are responsible for in the year of the sale. Generally, the percentage of the property tax the buyer is responsible for is added to the sale price of the house and paid to the seller.

The lawyer also facilitates the transfer of your down payment to the seller.

Most real estate lawyers are happy to sit down with a potential client and discuss any questions before they actually launch into the legal process.

You can expect to pay both your lawyer’s fee and your lawyer’s disbursements (costs a lawyer can’t avoid) such as courier fees, office administration fees, title insurance, and land title and mortgage registration. A lawyer’s fee might range from $600 and $1,200, plus GST, while the disbursement costs might come to $400 or $500. All in all, you should be budgeting between $1,500-$1,700 for a lawyer’s services.

Everything you need to know to close the deal and take possession of your new home.

Here’s a checklist of what needs to happen in the time between you making an (accepted) offer and moving into your new home:

  • Make a conditional or unconditional offer
  • Get a lawyer
  • Get final mortgage approval (conventional or insured)
  • Transfer the deposit to show that you’re serious about the place
  • Get a property appraisal
  • Transfer the rest of the down payment to the seller and take possession (YAY!)
  • Receive final approval and send documents to the lawyer
  • Get a home inspection
  • Buy title insurance through the lawyer
ATB Home Buying Guide

Want to know more things you should pay attention to when buying a resale?

Check out our home buying guide—we’ve built an interactive home buying checklist and scoring system to help you prepare.

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