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Pre-Approval

Mortgage Pre-Approval in Canada: Step-by-Step Process

Mortgage pre-approval in Canada follows a set order: you share your numbers, prove them with documents, consent to one credit check, get tested against the stress test, and leave with a maximum amount and a rate hold. Here is every step, and what can undo it.

Step-by-step processDocument checklistCredit check explainedRate hold of 90–120 daysWhat voids a pre-approvalFSRA #13737
FSRA #13737| 5-min pre-qualification

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #13737 · Updated September 2026

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Property value$750,000
Down payment$150,000
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Plenty of buyers treat pre-approval as a box to tick, then find out the hard way what it covers. They view homes at a price no lender has tested, send documents one at a time while rates move, or finance a car the week the letter arrives and watch the approval unravel before closing. Pre-approval is a sequence, and each step settles a question the lender needs answered. Know the order and you avoid most of the delays.

The short answer

A mortgage pre-approval in Canada is a lender’s conditional commitment to lend you up to a set amount, with a rate held for you, usually for 90 to 120 days. To get one, you gather ID, income and down-payment documents, consent to a hard credit check, and qualify under the federal stress test. It is not a final approval: new debt, a job change, a drop in your credit, a low appraisal or an expired hold can still void it.

What is a mortgage pre-approval?

A mortgage pre-approval is a written, conditional commitment from a lender to lend you up to a maximum amount at a held rate, based on your verified income, credit, debts and down payment. It sets your real shopping budget. Final approval still depends on the specific property and on your finances staying unchanged.

What you get

Why Canadians choose Mortgage Squad Advisors.

A clear order of operations, from the first conversation to a written pre-approval and rate hold
A document list sorted by how you earn, so salaried, commission and self-employed files arrive in one pass
How the stress test sets your maximum: the greater of your contract rate plus 2% or 5.25%
One application compared across 100+ lenders, including banks, credit unions and alternative lenders
On standard prime files the lender pays the broker, so pre-approval help is typically free to you
FSRA-licensed brokerage #13737, with Maya, our AI advisor, available for questions any time
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How it works

Three simple steps, no pressure.

1

Share your numbers and gather documents

Tell us your income, debts, down payment and target price. We give you a ballpark with no credit pull, then send a checklist matched to how you earn so the full document pack arrives in one upload.

2

Credit check and qualifying

With your consent we run one hard credit check, verify each document, and test your file against the stress test and debt-service limits, then compare the result across 100+ lenders to see where your file fits.

3

Receive your pre-approval and rate hold

The lender issues a maximum amount, its conditions and a rate hold, commonly 90 to 120 days. You shop inside that ceiling, keep your finances unchanged, and call us as soon as you have an accepted offer.

Run the math first

The mortgage pre-approval process in Canada, step by step

This is the full sequence a typical Canadian pre-approval follows. Steps 1 to 4 are yours, steps 5 and 6 are the lender’s work, and steps 7 and 8 happen once you find a home.

  1. Check your budget

    Run your numbers through the affordability calculator and the stress-test calculator. An estimate at this stage needs no documents and no credit pull.

  2. Confirm your down payment

    The minimum is 5% on the first $500,000, 10% on the portion up to $1.5 million, and 20% on homes above that. Note where every dollar sits: savings, an FHSA, a Home Buyers’ Plan withdrawal or a family gift.

  3. Gather your documents

    Collect ID, income proof, 90 days of down-payment history, full account statements, a list of debts and assets, and a signed gift letter if any funds are gifted.

  4. Apply and consent to a credit check

    The lender or broker pulls your credit report to see your score and every open account. It is a hard inquiry with a small, short-lived effect on your score.

  5. Underwriting and the stress test

    The lender verifies your income and down payment, works out your debt-service ratios, and qualifies you at the greater of your contract rate plus 2% or 5.25%.

  6. Pre-approval letter and rate hold

    You receive a maximum amount, a list of conditions and a held rate on one specific product. Write down the expiry date.

  7. Shop and make an offer

    Stay inside your approved ceiling and include a financing condition in your offer where you can, because the lender has not yet seen the property.

  8. Final approval

    With an accepted offer, the lender reviews the property, orders an appraisal if needed, re-checks your file and issues a firm commitment. Your lawyer takes it to closing.

Timelines, hold lengths and document rules vary by lender and product. Confirm current rules with your broker before relying on any figure.

What a lender measures at pre-approval

A lender pre-approving you is answering three questions: what you earn and whether it will continue, what you already owe, and whether your down payment is real and yours. Those answers feed two debt-service ratios, one for housing costs and one for total debt, calculated at the stress-test rate rather than the rate you will actually pay. That is why a pre-approval often comes in below a simple income multiple.

What a pre-approval does not measure is the house. The lender hasn’t seen the property, its value or its condition, so every pre-approval is conditional. It is also different from a pre-qualification, which is an unverified estimate built on numbers you state; our guide to mortgage pre-approval vs pre-qualification explains when each is enough. If you are deciding who to apply through, our complete guide to working with a mortgage broker in Canada covers how a broker compares lenders for you.

The documents lenders ask for

Documents are where most pre-approvals stall, so gather them before you apply. Every file needs identification (a valid government-issued photo ID; some lenders ask for a second piece), proof of down payment showing a 90-day history of the account holding the funds, complete bank and investment statements with your name and account number visible, and a list of debts and assets the lender can check against your credit report. If any of the down payment is gifted, add a signed gift letter confirming no repayment is expected.

Income proof depends on how you earn. Salaried and hourly employees usually provide recent pay stubs, a letter of employment and their two most recent T4s. Commission, bonus and overtime income is typically averaged over two years. Self-employed borrowers generally provide two years of Notices of Assessment, T1 Generals and business financial statements or business bank statements. Newcomers may also need proof of immigration status and a longer run of bank statements, which our new to Canada mortgage guide covers. The full list is on our documents needed for pre-approval page.

The credit check and your score

A firm pre-approval needs a hard credit check, because a lender can’t commit to a number without seeing your score and every open account. A hard inquiry has a small, short-lived effect. Early estimates and pre-qualifications can often use a soft check or none at all, which doesn’t touch your score.

The bigger risk is applying at several banks spread over months. Mortgage inquiries in a short shopping window are generally treated as one, and a broker avoids the problem altogether by using one credit report to compare many lenders. Before you apply, pull your own report, dispute any errors and keep card balances low. For the thresholds lenders use, see credit score for a mortgage.

The rate hold, and how long a pre-approval lasts

Most pre-approvals come with a rate hold, commonly 90 to 120 days, though holds of 30 and 60 days exist too. If rates rise during the hold, you keep the held rate. If they fall, many lenders will give you the lower rate, but float-down policies differ, so ask how yours works when the hold is issued. A hold costs nothing and doesn’t oblige you to take the mortgage. It covers one product, so switching from a five-year fixed to a variable usually means re-pricing at that day’s rate. Check current mortgage rates rather than relying on an old quote.

The pre-approval usually runs on the same clock. If you haven’t bought by the expiry date, it can normally be refreshed, but expect to send new pay stubs and statements (lenders generally want documents dated within the last 30 to 90 days) and you may have to requalify at current rates. Put the date in your calendar and start the refresh a few weeks early.

What can void a mortgage pre-approval

A pre-approval rests on a snapshot of your finances. Change the snapshot and the lender can reduce or withdraw the approval at final underwriting, even after your offer is accepted. New debt is the most common trigger: a car loan, furniture on credit or co-signing someone else’s loan raises your obligations and can push your ratios past the limit. A job or income change, such as a new probationary role, a move from salaried to self-employed or fewer hours, can break the income the approval relied on, even if you now earn more. A credit change matters because lenders re-check credit before closing, and a missed payment or new inquiry can lower your score. Unexplained deposits can fail down-payment verification.

The property can undo it too. A low appraisal means the lender funds against the lower value, and some lenders won’t finance certain buildings or property types. Finally, an expired hold or a changed deal (a different price, down payment or amortization) can mean requalifying. Keep everything unchanged until you close, and tell your broker before you make any change. If an approval does fall apart, our denied after pre-approval page explains the next steps.

Getting pre-approved through a broker

A brokerage gives you one application, one credit check and access to 100+ lenders. On standard prime files the lender pays the broker, so the service is typically free to you, and any fee on a non-standard file must be disclosed in writing before you commit. That matters most when a file isn’t straightforward, because a lender that declines one borrower can be the right fit for the next.

Still building your down payment? Our list of down payment assistance programs in Canada covers the FHSA, the Home Buyers’ Plan, family gifts and first-time buyer rebates. To talk to someone nearby, find your local mortgage broker in Toronto, Vaughan or Mississauga. When you’re ready, start a free pre-approval application.

FAQ

Common questions, answered.

Don’t see yours? Ask Maya — instant answer, any time.

How long does mortgage pre-approval take in Canada?
A ballpark estimate can be same-day with no documents. A verified pre-approval usually takes from a few hours to a couple of business days once all your documents are in. Self-employed and commission files often take longer because there is more income to review.
How long is a mortgage pre-approval valid?
Usually 90 to 120 days, in line with the rate hold. If you haven’t bought by then, it can normally be refreshed with updated documents, but you may need to requalify at current rates.
Does a pre-approval guarantee I’ll get the mortgage?
No. It is conditional. Final approval depends on the specific property, including any appraisal, and on your income, debts and credit staying the same until closing.
Does a mortgage broker charge for pre-approval?
On standard prime files, no. The lender pays the broker when the mortgage funds. Any fee on an alternative or private file must be disclosed to you in writing before you commit.

Related products

Guide to working with a mortgage brokerPre-approval vs pre-qualificationDown payment assistance programsNew to Canada mortgageDocuments neededDenied after pre-approvalFind your local mortgage brokerGet pre-approved free

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