Alberta’s Mortgage Rate Landscape

As of early 2026, variable mortgage rates in Canada remain generally lower than fixed rates, continuing a trend that began after the Bank of Canada’s aggressive easing cycle. However, expectations for further rate relief should be tempered.

Between June 2024 and October 2025, the Bank of Canada delivered nine consecutive rate cuts, bringing its overnight rate down to 2.25%, where it was held in January 2026. Since then, the Bank has shifted its tone. Rather than signalling more immediate cuts, policymakers are emphasizing a cautious, data-dependent pause. In other words, meaningful near-term rate drops are possible but far from guaranteed.

In its latest announcement, the Bank of Canada stated:

“Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.”

The message is clear: inflation control remains priority number one, and future rate moves will depend heavily on incoming economic data.

2026 Alberta Mortgage Market Outlook at a Glance

Variable Rates
Variable mortgages continue to offer lower initial rates, which can translate into immediate monthly savings. The trade-off is uncertainty. If inflation proves stubborn, additional rate cuts could be delayed or limited, keeping variable payments relatively steady rather than trending sharply lower.

Fixed Rates
Five-year fixed rates have been remarkably stable, supported by bond yields that have stopped falling but aren’t surging either. There is potential for fixed rates to edge lower later in 2026, but that will largely depend on how inflation, economic growth, and global bond markets evolve.

Bank of Canada’s Strategy
By holding the overnight rate on January 28, 2026 at 2.25%, the Bank is signalling a focus on economic stability rather than stimulus. This suggests variable rates may plateau for much of the year, rather than continuing the rapid declines seen in 2024 and 2025.

Variable vs. Fixed: Which Makes Sense Right Now?

Here’s where things get interesting. The big advantage of a variable rate is flexibility. If you choose a variable rate and the outlook worsens, you can typically switch to a fixed rate at any time with no penalty, providing peace of mind if rates start moving higher or inflation reaccelerates. Variable-rate mortgages also usually come with much lower break penalties if you need to exit the mortgage early due to a home sale.

Fixed rates, on the other hand, offer predictability. You’ll know exactly what your payment is for the next five years. But you’re paying a bit of a premium for that certainty right now. For borrowers who value stability above all else (and don’t want to lose sleep over rate announcements), fixed can still be the right choice. If fixed rates rise, the penalty for breaking your mortgage early—such as due to a home sale—can be significant.

For borrowers comfortable with a bit of short-term uncertainty who want to take advantage of lower pricing today, variable rates are currently the stronger play. For those who prioritize payment certainty and peace of mind, a fixed rate remains the safer option—even if it comes at a slightly higher upfront cost.

As a local Alberta mortgage broker, I can help you weigh the pros and cons based on your unique financial situation. Get in touch today to get started.