Process & paperwork

Pre-approval

A lender's conditional, written estimate of the maximum mortgage you can get and the rate it will hold for you while you shop. Rate guarantees run about 60 to 130 days depending on the lender. It is not a final approval: the property, appraisal and updated documents still have to be approved.

A real pre-approval is more than an online estimate. The lender (or broker) reviews your credit, income, debts and down payment, runs your debt-service ratios at the stress-test qualifying rate, and holds a rate for you. If rates rise while you shop, you keep the held rate; if they fall, many lenders will give you the lower rate at approval.

It is not a guarantee. The final approval depends on the specific property (appraisal, condition, condo documents), verification of every document, and nothing material changing, so don't take on new debt or change jobs mid-search. A pre-approval tells you your ceiling and makes your offer more credible; most offers should still include a financing condition.

Getting pre-approved through a broker means one application that can be matched to the lender that fits your file, so you start house-hunting knowing your budget and the rate hold behind it.

Worked example

Illustrative: household income $120,000, $600/month car loan, estimated property tax $450/month and heat $120/month. At an assumed 4.00% contract rate, the stress-test qualifying rate is 6.00%, and the 44% TDS limit caps the qualifying payment at $3,230/month, a mortgage of about $505,000 over 25 years.

With 10% down, that supports a purchase price of roughly $560,000 before the insurance premium. The pre-approval sets the ceiling; the property you choose still has to be approved.

Illustrative figures only, rounded; not a quote or current rate. See today’s rates on our live board.

Sources

Getting a mortgage preapproval (Financial Consumer Agency of Canada)
Calculating GDS / TDS (CMHC)
Minimum qualifying rate for uninsured mortgages (OSFI)

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More on Process & paperwork

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Appraisal

An independent valuation of the property used by the lender to confirm the purchase price is reasonable and to determine maximum loan-to-value. Most files require a full appraisal; some refinances accept a desktop or automated valuation.

Home inspection

A professional review of the property's structural, mechanical, and safety condition. Not legally required but strongly recommended on every resale purchase. Typical cost: $400-$700.

Mortgage broker

A licensed professional who shops your mortgage across multiple lenders to find the best fit. Paid by the lender on funding (not by you). Regulated provincially — FSRA in Ontario.

Renewal

When your term ends, you sign a new mortgage agreement for the remaining balance: same property, new rate and term, with your current lender or a new one. Federally regulated lenders must send a renewal statement at least 21 days before the term ends.

Underwriting

The lender's review of your application — credit, income verification, asset confirmation, property appraisal — leading to formal approval and a mortgage commitment.

Power of sale

An Ontario lender's right to sell a property to recover an unpaid mortgage without going through formal foreclosure. Faster than US-style foreclosure. Specialty advisors can negotiate workouts.

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