Cost of Borrowing · Calgary
What Borrowing Really Costs in Calgary
The monthly payment is the number lenders lead with and the least useful one for comparing. Here is how to read what a loan actually costs, and the rules that limit it in Alberta.
The two numbers that matter
APR (annual percentage rate) rolls the interest and most mandatory fees into one yearly rate, so two loans with different fee structures can be compared fairly. Total cost of borrowing is the dollar amount you will pay on top of what you borrowed if you make every payment on schedule. Lenders must disclose both in writing before you sign. A longer term lowers the payment and usually raises the total cost.
How cost compares across loan types
| Loan type | Relative cost | Fees to ask about |
|---|---|---|
| First mortgage | Lowest | Appraisal, legal, Land Titles registration, prepayment penalties |
| HELOC | Low | Appraisal, legal, possible setup fee |
| Second mortgage | Medium to high | Lender fee, broker fee, appraisal, legal |
| Car loan | Low to high, by credit | Add-on products, prepayment terms |
| Personal loan | Low to high, by credit | Origination fee, optional insurance |
| Business loan | Varies widely | Factor rates, personal guarantees |
| Payday loan | Highest by far | Set by Alberta's payday rules |
The legal ceiling
Since January 1, 2025, it is a criminal offence in Canada to lend at more than 35% APR on most consumer and business loans (Criminal Interest Rate Regulations, SOR/2024-114). Payday loans that follow a province's own payday rules are exempt from that ceiling, which is why they cost far more. In Alberta, payday lenders must be licensed and follow provincial limits on cost, repayment terms and rollovers; the Government of Alberta publishes the details.
What moves your rate
- Credit history. The biggest single factor for unsecured loans. Check your reports free at Equifax and TransUnion.
- Income and debt load. Lenders compare your monthly debt payments to your income.
- Security. A home or vehicle pledged against the loan lowers the lender's risk and your rate.
- Term. Shorter terms cost less in total.
- Where you borrow. Rates for the same borrower can differ a lot between lenders, which is the reason to be matched rather than walking into the first one.
The Financial Consumer Agency of Canada has free calculators and guides for comparing loans and mortgages.
Frequently asked questions
What is the maximum interest rate allowed in Canada?
Since January 1, 2025, the criminal interest rate is 35% APR for most loans. Provincially regulated payday loans are exempt and follow their own provincial limits.
Is a lower monthly payment always better?
No. A lower payment often means a longer term and a higher total cost. Compare APR and total cost of borrowing.
Do I pay Calgary Lending anything?
No. Our service is free to you. We may receive a referral fee from the lender or broker, paid by them.
This guide is general information, not financial advice. Rates, fees and rules change; your lender's written cost-of-borrowing disclosure is what counts. Last updated October 14, 2026.