The Canadian housing market has been making headlines in recent months. Just check out this sample of recently published articles:

Here in Calgary, we have been fairly insulated from the double-digit home price increases that many other major Canadian cities have experienced. And while there are several factors attributing to this price jump (including supply and demand issues and foreign investment), interest rates hold a prominent place on this list.

A Historical Look at Canadian Interest Rates

It all starts with the Bank of Canada, a crown corporation and Canada’s central bank. Wowa gives this historical overview on the Bank of Canada:

It was chartered in 1934 under the Bank of Canada act and is responsible for formulating Canada’s monetary policy and regulating Canada’s financial systems. Its principal role is “to promote the economic and financial welfare of Canada”. Led by a governing council, its main tool for conducting monetary policy is the target for the overnight rate, or the key policy rate. By changing this rate, it can influence the supply of money circulating within Canada’s economy. It is also solely responsible for the issuance and distribution of Canadian currency and regulation of foreign currency reserves.

Originally created in response to the Great Depression, the Bank of Canada’s rate was 2.5% in 1935. In 1994, Bank of Canada began reporting on their overnight rate as its key monetary policy instrument. The overnight rate is important as it influences the rates (including mortgage rates) that banks establish for lending purposes.

Here is the Coles notes version of how the Bank of Canada rate has fluctuated since 1935:

  • As Canada emerged from the Great Depression and the economy strengthened as we headed into World War II, the rate hit 1.5% in 1945 which led to a surge in business investment in manufacturing and consumer investment in housing
  • In 1955, the rate rose to 2.0%, which was the start of a slow rate rise through the 1960s and early 1970s
  • The rate hit double-digits at 10.25% for the first time in 1978 – the global oil crisis and resulting recession was a factor in this increase
  • The record high rate of 20.03% was reached in August 1981, in tandem with record high oil prices, and stayed high throughout the 1980s
  • The post-recession 1990s saw the rate slowly begin to drop
  • In 2009, the rate dropped below 1% for the first time ever (at 0.5%)


The Current State of Interest Rates in Canada

At the time of writing, the Bank of Canada’s overnight rate is 0.25% (as announced on September 8, 2021). Their rationale for maintaining the overnight rate at 0.25% is that despite the global economic recovery activity underway, there have been significant supply chain disruptions that continue to stymie progress in certain sectors and also due to rising COVID cases in many regions. Current Bank of Canada projections anticipates this rate staying low until at least Q2 2022.

What This Means for Today’s Home Buyer

For many Calgarians, their home is one of their primary assets and a major component of their retirement portfolio. It can also be a source of equity against which one can use their home as collateral to secure funding for alternate uses (this is typically done through a Home Equity Line of Credit).

In a low interest environment, like we are currently experiencing, mortgage payments are significantly more affordable than during periods of high interest rates.

Simply put: it’s a fantastic time to buy.

Mortgage rates at a few major lending institutions are currently as follows:

Let’s take a bit of a stroll down memory lane and see what Calgary housing prices and mortgage rates have looked like over the past twenty years (assuming a 25 year amortization):


And here is a chart depicting how today’s average 5-year rate of 2.79% translates to home purchases at a variety of price points. Note, these examples assume a 25-year amortization.


This current featured listing in the amazing community of Mahogany comes with lake access and is in close proximity to green spaces, pathways, transit, and shopping.

This home features top of the line stainless steel appliances, built-in lockers, air conditioning, 9’ ceilings on the main floor and much more.

The open and bright main floor features a great room, a two piece bathroom, a dining area, a kitchen that offers an island and access to the deck and backyard. Learn more about this listing.

Purchase price Down payment Monthly mortgage Bi-weekly mortgage
$412,000 5% ($20,600) $1,882.78 $868.44
$412,000 10% ($41,200) $1,768.25 $815.61
$412,000 15% ($61,800) $1,665.16 $768.06
$412,000 20% ($82,400) $1,524.52 $703.19



Located on a large pie lot with a west facing backyard and access to green space, this current featured listing offers numerous upgrades and features which include: air conditioning, shingles done in 2020, upper bedrooms with ceiling fans, hot water on demand, a new kitchen in 2017, gas fireplace, a large two tier deck with gas line and gas firepit, top two floors painted 2020 except the bedrooms, new rear fence two years ago, deck and front porch stained two years ago, jetted tub, hardwood floors, large front drive way room for four cars and so much more.

The main floor features a two-piece bath, laundry, living room, dining room, and a great room with a gas fireplace. The kitchen offers a pantry, island, and nook that has access to the west facing two tier deck and large pie lot. The upper floor features a four-piece bathroom and three good size bedrooms. The primary bedroom offers a walk-in closet and full ensuite with jetted tub, The lower level features a three-piece bathroom, bedroom, family room, great room and storage/utility room. Close to green spaces, schools, shopping, bus, and easy access to Stoney Trail and Deerfoot Trail. Learn more about this listing.

Purchase price Down payment Monthly mortgage Bi-weekly mortgage
$544,900 5% ($27,245) $2,490.12 $1,148.57
$544,900 10% ($54,490) $2,338.64 $1,078.70
$544,900 15% ($81,735) $2,202.29 $1,015.81
$544,900 20% ($108,980) $2,016.29 $930.02



This current featured listing is a brand new three bedroom infill in North Glenmore Park, and is loaded with upgraded features. These features include: 9’ceilings on all three levels, 2.5 bathrooms. electric fireplace, top of the line stainless steel appliances, upscale finishing throughout, modern galley style kitchen, quartz counters throughout, LVP, tile and carpet flooring, white flat slab cabinetry, luxury five-piece ensuite bathroom, 22 X 20 detached garage, 17’6″ X 10′ deck, gas line to deck and so much more.

The bright open main floor features a great room with electric fireplace, a two-piece bathroom, a galley kitchen with plenty of counter space, island with eating bar and a dining area that has access to the deck and yard.

The upper floor features a four-piece bathroom, laundry and three spacious bedrooms, The master bedroom features a walk in closet and full ensuite with soaker tub & separate shower.

Located across the street from green space with a playground, this home is close to schools, bus, shopping, and all other amenities. Learn more about this listing.

Purchase price Down payment Monthly mortgage Bi-weekly mortgage
$719,900 5% ($35,995) $3,289.84 $1,517.44
$719,900 10% ($71,990) $3,089.72 $1,425.14
$719,900 15% ($107,985) $2,909.58 $1,342.05
$719,900 20% ($143,980) $2,663.84 $1,228.70



This six-month-old, original owner stunning home, a current featured listing, has over 3700 square feet of developed living space, including seven bedrooms and five full bathrooms.

Backing on to a pond in the community of Carrington, additional features include:

9’ ceilings, top of the line stainless steel appliances which includes two gas stoves, quartz counters, cabinets by Kingswood cabinets, custom window coverings, upgraded lighting throughout, wet bar, laundry on upper and lower floor, air conditioning, separate entrance on side to access lower level, over sized lot, upgraded front door, oversized double attached garage, over sized windows in basement, garburator rough-in, energy efficient air conditioning with two separate controls, and a vaulted bonus room. Learn more about this listing.

Purchase price Down payment Monthly mortgage Bi-weekly mortgage
$899,900 5% ($44,995) $4,112.42 $1,896.86
$899,900 10% ($89,990) $3,862.26 $1,781.47
$899,900 15% ($134,985) $3,637.07 $1,677.61
$899,900 20% ($179,980) $3,329.89 $1,535,92


If you’d like to discuss any of the featured listing here, or see what else we have available in your price point, please reach out.