If you’re a first-time home buyer in Calgary or anywhere across Alberta, you’re probably keeping an eye on interest rates—and for good reason. After a rocky few years of rate hikes, cuts, and uncertainty, many buyers had been hoping for relief this summer. Unfortunately, the latest inflation data suggests, yet again, that relief might be further away than expected.
As a mortgage broker working with first-time buyers every day, here’s what I need you to know right now about rates, inflation, and how this impacts your home purchase plans.
Inflation Isn’t Cooperating—And That’s a Problem for Rates
Canada’s inflation rate crept up again in June. While the headline inflation number (1.9%) stayed near the Bank of Canada’s target, the numbers under the hood tell a different story.
- Core inflation, the BoC’s preferred measure because it strips out volatile items like gas, ticked up to an average of 3.05%, and the breadth (the % of the basket showing more than 3% inflation) also widened.
- Shelter costs—especially rent and mortgage interest—continue to be major drivers. Rent increased to 4.7% year-over-year, and mortgage interest is still hovering at a high 5.6%.
- The result? Economists are warning that there’s almost no justification for a rate cut on July 30, and even September is looking more doubtful.
As BMO’s Chief Economist Douglas Porter put it, “Underlying inflation remains stubbornly strong.” That’s a big deal—especially if you’ve been waiting for lower rates to jump into the housing market.
Fixed Mortgage Rates in Calgary Are Rising—Fast
Yields on 5-year government bonds (which lenders use to price fixed mortgage rates) spiked this week following the inflation data. This directly affects the rates you’ll be offered.
Here’s what we’re seeing:
- Fixed rates that had dipped into the low 4s are now heading toward the mid-4% range.
- Some lenders began adjusting their rate sheets the day after the inflation release.
- If you haven’t secured a rate hold yet, you might want to act fast—this window could close quickly.
Many buyers in Calgary, Red Deer, and Lethbridge had been holding off, hoping for a better deal. But waiting could now cost you—both in monthly payments and in qualifying under the mortgage stress test.
Variable Rates Still Carry Risk
If you’ve been considering a variable-rate mortgage, you’re not alone—but the market has grown cautious:
- Only 28% of buyers in July went with variable rates, down from over 30% in June.
- The Bank of Canada’s next move is still uncertain. While some banks (like Desjardins) think the BoC may resume cutting in September, others (like Scotiabank) believe we’ve already seen the last cut of 2025.
- The truth? Nobody knows. And with core inflation rising, the chance of more cuts is getting slimmer.
What Should First-Time Buyers in Calgary Do?
If you’re buying in Calgary or anywhere in Alberta right now, this may feel overwhelming. But the key is preparation, not panic.
Here’s what I’m telling my clients:
- Lock in a rate hold now. Even if you’re not buying for a few months, securing today’s rate could save you thousands if rates continue to rise.
- Get pre-approved. With rate changes moving fast, you need to know exactly what you qualify for before you house hunt.
- Talk to a broker (like me). Lenders aren’t all reacting the same way. Some are moving faster than others. A broker can shop around for you and find the best terms based on your timeline and risk tolerance.
Uncertainty Is the New Normal
The current inflation situation is complicated—not just in Canada, but globally. Tariffs, economic uncertainty, and political volatility (hello, U.S. election cycle) are all putting pressure on bond markets and rates. And for the Bank of Canada, cutting rates without clear signs of easing inflation could damage their credibility.
The message to first-time buyers? Don’t wait for the perfect time. It may not come.
Instead, focus on:
- What you can afford today
- What protections (like rate holds) you can put in place
- And who’s in your corner helping you navigate it all
If you’re in Calgary or anywhere in Alberta and want to talk through your mortgage options, I’d be happy to help. Reach out today to get started or secure a rate hold before the next lender update.
