With the Bank of Canada’s next rate announcement approaching at the end of July, many Albertans—especially first-time home buyers—are asking themselves: Should I wait for lower interest rates, or get into the market now before prices climb even higher?
As a mortgage broker working with clients across Alberta, I recently sat down with my colleague Jay to break down what’s happening with interest rates, fixed vs. variable strategies, and how the current market is affecting first-time buyers in particular.
Is the Bank of Canada Done with Rate Cuts?
“Are [rates] going to drop? Where are they going?” Jay asked—echoing the most common question I hear these days.
The reality is: we may have already seen the last of the Bank of Canada’s rate cuts for a while.
“The Bank of Canada did not drop rates in either April or June,” I explained. “And we’re probably not going to see another rate drop in July either.”
Even the major banks are divided. “Royal Bank recently changed their forecast. They’ve told us they don’t think there’s going to be any more rate drops,” I added. RBC believes the current overnight rate of 2.75% may be as low as it gets. Variable mortgage rates sit around 4% right now.
Still, it’s not a consensus across the board. “Most of the other big banks—five of which we deal with heavily in Alberta—are still expecting a half-percent rate cut between later this year and the middle of next year,” I noted. But that movement will be slow.
Fixed Rates: Already Dropped, But Room to Fall Further
“Once the Bank of Canada started lowering its policy rate, fixed mortgage rates didn’t budge much,” I said. “That’s because fixed rates had already dropped in anticipation.”
Earlier this year, fixed rates were hovering around 6%. They dropped to nearly 4% before inching back up recently—almost a full 2% drop. National Bank, though not a dominant lender in Alberta, forecasts that we could still see another 0.5% decrease in fixed rates based on historical patterns.
So, if they’re right, we might see fixed mortgage rates land between 3.5% and 4% in the coming months.
What Should First-Time Home Buyers in Edmonton Do?
Jay and I both work with a lot of first-time home buyers, and their concerns are unique: they’re often trying to time the market, qualify with tight budgets, and make sense of fast-changing information. The question they’re constantly asking? Should we wait to buy?
“The common logic is, if interest rates are going to drop, then you’ll save thousands,” I said. “But that doesn’t account for what’s happening to home prices.”
In Alberta—especially in cities like Edmonton and Calgary—home prices have been inching up. “If prices go up 4–5% while you’re waiting for rates to drop just 0.5%, you might end up paying $20,000 more for the home,” I cautioned.
This is particularly important for first-time buyers, who are working with entry-level budgets and are more vulnerable to both price increases and interest rate changes.
“There are ways to plan strategically,” I advised. “For example, if you’re willing to take on some interest rate risk, a variable-rate mortgage could help you take advantage of future drops—even if you buy now.”
Edmonton Inventory, GST Rebate, and Buyer Pressure
Jay offered important insight from the front lines of Edmonton’s real estate market: “We’re still definitely in a seller’s market. Inventory is low, and builders aren’t bringing as much new stock.”
On top of that, the GST rebate for first-time home buyers has added fuel to the fire. This federal incentive is designed to help first-timers afford newly built homes, offering a rebate on the GST portion of the purchase. While helpful, it is expected to increase buyer activity—further tightening supply.
“We’re seeing more pressure from first-time buyers entering the market,” Jay said. “If you’re thinking of waiting, that could actually put you at a disadvantage.”
His advice? “Talk to Josh. Let’s work out a strategy that gives you flexibility if rates do fall—but still gets you into a home before prices rise even more.”
Putting It Simply
If you’re a first-time home buyer in Alberta, the market is telling us two things:
- Rates might drop a little more—but not quickly.
- Home prices are likely to keep rising, especially with inventory low and demand building.
If you’re waiting for the “perfect” rate, you might miss the best opportunity to get into the market affordably. With the right mortgage strategy—whether fixed or variable—you can protect yourself and still benefit if rates move.
Let’s talk about your goals, budget, and how to make the most of the current conditions. My team at Mortgages for Less is here to help you build a custom mortgage plan that fits your life—not just the market headlines.
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