Welcome to your comprehensive guide to navigating Alberta's evolving economy and housing market. In this report, updated January 28, 2026, we'll dive into the factors shaping homeownership in our province—like the Bank of Canada’s rate adjustments—and how they impact your home ownership journey.

Whether you’re looking to buy or already own, we’ve gathered insights from our economics and mortgage teams, each offering their deep expertise with a uniquely Albertan lens. By distilling complex economic data into practical insights, we aim to empower you with the knowledge needed to confidently navigate affordability, mortgage options and the changing landscape of Alberta real estate.

This report will be updated regularly following each Bank of Canada rate announcement, so you have the most current information.

The Bank of Canada announced on January 28, 2026 it will  hold the interest rate at 2.25%, the second one in a row, was widely anticipated by pretty much everyone, including us.

Finding the right balance

The Bank seems fairly comfortable where they are. The economy has been more resilient than expected, but core inflation is still sticky and slightly above target.

From the press release: “Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today.”

The Bank could lower the rate to offset ongoing trade headwinds, but that would be inconsistent with keeping inflation in check. And raising the rate seems premature - the economy is not on a solid footing.

If the rate pause is not the news, what is? The Monetary Policy Report (MPR). It contains a fresh set of economic forecasts, providing some guidance as to what Bank of Canada economists see ahead.

The Bank is forecasting Canadian GDP growth of 1.1% in 2026 and 1.5% in 2027. You can look at this in two different ways.

On the one hand, this growth forecast is underwhelming. Uncertainty, particularly around the CUSMA review, is holding back investment and the economy is losing its lift from population growth. The economy desperately needs a rotation towards investment and exports. We see these as conservative base case forecasts (our December outlook pencilled in national growth of 1.6% in 2026 and 1.8% in 2027).

On the other hand, the economy is performing better than feared. When the trade war kicked off, one tariff scenario in April ran by the Bank had real GDP contracting for four consecutive quarters. In reality, the economy contracted in only 2025Q2, and now the Bank is estimating growth in 2025 of 1.7% (up from 1.2% in October) - exactly in line with our own estimate.

As for inflation, the Bank says underlying, or core, inflation is sitting at about 2.5% - above the 2% target. But, over the forecast period, the Bank sees inflation near 2% “with trade-related cost pressures offset by excess supply.”

Is now a good time to buy a home in Alberta?

For those of you thinking about buying a home in Alberta right now, it's a mix of good news and challenges. On the plus side, With the Bank of Canada holding the overnight rate steady, the prime rate has remained at 4.45%. This means Albertans with variable rate mortgages won’t see their monthly mortgage payments change for now, allowing new buyers to plan their budgets with more certainty than during the volatile rate hikes of recent years. Overall borrowing costs for mortgages, loans, and lines of credit remain lower than they were earlier this year, which is a positive trend for both current and future homeowners.  While the Bank of Canada held the policy rate, government bond yields, which influence fixed mortgage rates, have risen slightly due to strong economic data and global trade uncertainties. As a result, five-year fixed mortgage rates are trending slightly upward, potentially making it a good time for Alberta homeowners to consider securing a rate hold before rates climb further.

What do these rates mean for me?

To give you a clear picture of how this impacts your wallet, consider this:

• In early January 2025, a $450,000 mortgage with a 5-year variable rate at 4.75% and a 25-year amortization would have had a monthly payment of $2,566.
• By April 3, 2025, with the rate at 4.25%, that same mortgage's monthly payment drops to $2,438.

That's a monthly saving of $128, which adds up to $1,536 a year or a significant $7,680 over a 5-year term. With a bit of a softening in home prices and these lower rates, homes are becoming more affordable, giving you a better chance to get into the market. And the good news continues with Alberta's strong pace of new home construction. This means there should be more housing options available, which can help keep price increases in check in the long run. Plus, compared to cities like Vancouver and Toronto, Alberta remains a more affordable place to live. 

If cash flow or changes in your payments make you uneasy, now might be the time to review your mortgage and potentially move to a fixed rate. Some early predictions suggest the Bank of Canada may continue to hold or even start raising rates later in 2026 or early 2027.

How Do Rate Changes Affect My Variable-Rate Mortgage?

For current homeowners in Alberta, the recent economic developments present both opportunities and things to keep an eye on. If you have a variable-rate mortgage, you've likely already seen the benefit of the Bank of Canada's interest rate cuts earlier this year, with either lower monthly payments or more of your payment going towards the principal.

To illustrate the impact of rate changes, here’s an example: say you initially have a 5-year variable closed mortgage at 4.75%, then the rate for your same mortgage drops to 4.25%. If you keep your payment the same, it would decrease your amortization period—how long it takes to pay off your mortgage—by two years and one month. This demonstrates how lower rates can accelerate your payoff and reduce the total interest you’d have to pay.

What If I Have A Fixed-Rate Mortgage?

If you have a fixed-rate mortgage, your rate hasn't changed—but it's worth noting that the drop in government bond yields could mean lower rates for you if your mortgage is coming up for renewal soon.

Growing Home Equity from Resale Prices

One of the big positives for Alberta homeowners is the strength of the housing market. With rising resale prices, particularly in cities like Calgary and Edmonton, your home equity—the difference between your home's value and what you still owe—is likely growing.

Refinancing Your Mortgage: Pros and Cons

With the Bank of Canada currently holding its rate, and the potential for rates to continue to hold or even start rising later in 2026 or in early 2027, it is important to carefully consider the pros and cons of refinancing your mortgage.Refinancing essentially means replacing your current mortgage with a new one, and it’s a strategy that depends on your situation.

Potential benefits of refinancing

• Lower interest rates. If rates have declined since you got your original mortgage, refinancing can secure you a lower rate.
• Reduced monthly payments. A lower rate can translate into lower monthly payments, freeing up cash for other needs.
• Debt consolidation. Refinancing can allow you to combine other debts (like credit card debt) into your mortgage, potentially simplifying your finances and lowering your overall interest costs.
• Access to home equity. You can refinance to "cash out" some of your home equity, which can be useful for home renovations, investments or other significant expenses.

Potential Drawbacks of Refinancing

• Closing costs. Refinancing involves expenses like appraisal fees, legal fees and other closing costs, which can add up.
• Prepayment penalties. You might face penalties for paying off your existing mortgage early to refinance, depending on your mortgage terms.
• Extended loan term. Refinancing to lower your monthly payments could mean extending your loan term, which ultimately means paying more interest over the long run.
• Credit score impact. Refinancing requires a hard credit check, which can slightly and temporarily lower your credit score.
• Resetting amortization schedule. Refinancing resets how long it takes to pay off your mortgage, meaning more of your early payments will go towards interest rather than paying down the principal (the initial loan amount).

Leveraging Home Equity Through Renovation and Rental Income

With house pricing in Alberta rising, many people may be rethinking how they live in their current homes. Some are delaying their dreams to move to a larger space due to affordability concerns, instead choosing to improve their existing properties. And with strong population growth in Alberta, many homeowners are also taking advantage of refinancing to create secondary suites in their homes. This can generate rental income to help offset costs, while potentially adding value to the property. Secondary suites can also be a great option for multi-generational families, providing accommodation for aging parents or young adult children.

What Could Higher Interest Rates Mean For My Mortgage Renewal?

If your mortgage is up for renewal, our experts caution that, while we have seen interest rates come down from their peak, many Canadian homeowners renewing in 2026 are expected to face higher interest rates and increased monthly payments—especially those who took out mortgages at historically low rates during the pandemic. Online mortgage calculators, like our mortgage payment calculator, can help you get a sense of how your payments might change, but it's always best to seek personalized advice from a mortgage specialist as early as possible. They’ll help you find the right solution for right now.

What Factors Should I Consider Beyond the Interest Rate?

While getting the best rate is important, it’s not the only factor. Here are other aspects to think about:

• Does the term or repayment align with your goals, including any plans to sell?
• Does the mortgage offer flexibility in case of unexpected life events, including the ability to skip or defer payments?
• What are the costs, penalties or restrictions on making future changes to your mortgage?
• Does the mortgage allow for flexibility in making lump-sum payments or increasing regular payments to pay it off faster?
• Do you have mortgage credit protection insurance? If you switch lenders, your existing coverage will be canceled and you'll need to reapply. This could affect your premiums and eligibility, especially if your health has changed.

Two Main Strategies When Mortgage Payments Decrease

When the cost to borrow on a mortgage decreases, you have two main options: you can lower your mortgage payments to increase your cash flow, or pay off your mortgage faster by maintaining the same payment—more of your payment will go toward the principal amount on your loan, building more equity.

When it comes to deciding whether to save or pay down your mortgage, our experts often suggest a combination of both. Contributing to Registered Retirement Savings Plans (RRSPs) can provide tax benefits, while using tax refunds to make lump-sum payments on your mortgage can accelerate your payoff.^*

What is the Single Best Way to Navigate the Housing Market?

However you’re hoping to navigate the current housing market, remember that the best way to navigate any change is to make the best decision for your life. Rates will continue to fluctuate, as will our economy, so meeting with an expert to get a full picture of what’s best for you now and in the future will equip you to make informed decisions.

So, where does this leave us? The bottom line is that repairing the economy will need to be done outside monetary policy levers. At the moment, all eyes are on fast-tracking major projects and the need to build productive stuff in Canada. 

That means planning ahead is more important than ever.

If you're looking to buy, it’s all about being strategic and grounding in your personal situation. Explore how much you’d have to pay if the variable mortgage rates go up, and talk with an expert to figure out the next right move for you. And if you already own a home, now's the time to think about how you can maximize your investment. Your home equity is likely growing, so explore whether refinancing makes sense.

We all know there are things we can't predict, especially with how the tariff situation plays out. Alberta's economy is still looking pretty good, thanks to our relative affordability and growing population, but it's important to be prepared. Equipped with the right advice, you can make the most of what Alberta's housing market has to offer.