Mortgage Tips

Down Payment

In Canada, the minimum down payment depends on the purchase price of the home.

Current rules are:

Homes up to $500,000: minimum 5% down
Homes between $500,000 and $1,500,000: 5% on the first $500,000 + 10% on the remaining amount
Homes over $1,500,000: minimum 20% down

Example:
If you buy a $600,000 home in Calgary, the minimum down payment would be:

5% of $500,000 = $25,000
10% of $100,000 = $10,000
Total minimum down payment: $35,000

If your down payment is less than 20%, you must purchase mortgage default insurance through the Canada Mortgage and Housing Corporation, which protects the lender if you cannot make your mortgage payments. The insurance premium is usually added to your mortgage. 

Many first-time buyers in Calgary purchase condos or townhomes with 5–10% down, especially when using savings from programs like the FHSA or RRSP Home Buyers’ Plan.

 
Mortgage Term vs Amortization

Canadian mortgages are structured a bit differently than U.S. mortgages.

Amortization: total time it takes to pay off the mortgage (commonly 25-30 years)
Term: the length of your mortgage contract before renewal (often 5 years)
At the end of your mortgage term, you’ll renew your mortgage at the current interest rate with your lender or switch to a different one.

Most Calgary buyers choose a 25-year amortization, although some first-time buyers may qualify for 30-year amortizations on insured mortgages depending on program eligibility.

 
Mortgage Type

The two most common mortgage types in Canada are:

Fixed-Rate Mortgages
Your interest rate stays the same for the entire mortgage term (for example, a 5-year fixed rate). Your payments remain predictable, which many Calgary homeowners prefer when budgeting.

Variable-Rate Mortgages
Your interest rate moves with the prime rate set by lenders, which is influenced by decisions from the Bank of Canada. Payments may fluctuate depending on the lender and mortgage structure.

Variable mortgages often start with lower rates but can change as interest rates rise or fall.

 
Interest Rate

Your mortgage rate will depend on several factors, including:

Credit score
Down payment amount
Income and employment stability
Debt levels
Mortgage type and term
Mortgage rates can vary significantly between banks, credit unions, and mortgage brokers, so a lot of buyers shop around before committing.

 
Property Taxes

Property taxes in Calgary are based on your home’s assessed value and the municipal tax rate set by the City of Calgary.

Some lenders include estimated property taxes in your monthly mortgage payment, while others allow you to pay them directly to the city.

 
Home Insurance

Home insurance is required by lenders before your mortgage can fund. It protects your home from risks such as fire, theft, and water damage.

Insurance costs depend on factors like:

Home value
Property type
Location
Coverage limits
Condo insurance is typically cheaper because the building itself is insured by the condo corporation.

 
Condo Fees (HOA Fees)

If you purchase a condo or townhouse in Calgary, you’ll likely pay monthly condo fees.

These fees help cover shared costs such as:

Building maintenance
Snow removal and landscaping
Exterior repairs
Building insurance
Amenities like gyms, elevators, or concierge services
Contributions to the building’s reserve fund
Condo fees vary widely depending on the building and amenities, so it’s important to factor them into your monthly housing budget.

 
Closing Costs in Calgary

In addition to your down payment, buyers should budget about 1%–1.5% of the purchase price for closing costs.

Common closing costs include:

Real estate lawyer fees
Land title registration
Title insurance
Property tax adjustments
Home inspection
Moving expenses
The good news: Alberta has no provincial land transfer tax, which helps keep closing costs lower than many other Canadian provinces.

 
First-Time Buyer Programs in Canada

Several programs can help first-time buyers in Calgary purchase their first home.

First Home Savings Account (FHSA)
Allows you to save up to $40,000 tax-free toward your first home. Contributions are tax deductible and withdrawals for a home purchase are tax-free.

Home Buyers’ Plan (HBP)
Allows you to withdraw up to $60,000 from your RRSP (per person) to use toward a down payment.

Mortgage Default Insurance Programs
High-ratio mortgages (less than 20% down) are insured by organizations like Canada Mortgage and Housing Corporation, allowing buyers to purchase homes with as little as 5% down.

Many Calgary buyers combine these programs to reach their down payment faster.