Posted On Feb 26, 2026
Ready to stop scrolling through real estate apps and start actually walking through your future front door? In the Canadian market, a mortgage pre-approval is no longer just a "nice to have." It is your VIP pass to the home-buying game.
Whether you are a first-time buyer in the GTA or looking for a quiet spot in the Maritimes, understanding the pre-approval process is the difference between a smooth closing and a heartbreaking "rejected" notification.
1. What Exactly is Mortgage Pre-Approval?
Think of a pre-approval as a financial health check from a lender. Unlike a pre-qualification (which is just a rough estimate based on what you tell them), a pre-approval involves a deep dive into your actual documents.
The lender will tell you:
- The maximum amount you can borrow.
- Your estimated monthly payments.
- A locked-in interest rate (usually for 90 to 120 days).
2. The Step-by-Step Canadian Roadmap
Getting pre-approved does not have to be a headache if you have your ducks in a row. Here is the standard process:
Step 1: Gather Your "Big Three" Documents
Lenders are sticklers for paperwork. You will need:
- Proof of Income: Recent pay stubs, T4s, and a letter of employment. (If you are self-employed, have your last two years of NOAs ready.)
- Proof of Down Payment: 90 days of bank statements showing you have the funds.
- Identification: A valid government-issued photo ID.
Step 2: The Credit Check
The lender will run a hard credit inquiry. Most prime lenders look for a score of 680 or higher to give you the best rates.
Step 3: The Stress Test
Even if you find a great rate, Canadian law requires you to pass the Mortgage Stress Test. You must prove you can still afford payments if rates rise to either 5.25% or your contract rate + 2%, whichever is higher.
3. Why You Need It (The Benefits)
- Rate Protection: If interest rates spike while you are house hunting, your locked-in rate stays put.
- Serious Buyer Status: Sellers are much more likely to accept an offer from someone who already has a lender's approval.
- Reality Check: It prevents you from falling in love with a $900,000 home when your budget is $750,000.
4. The "Don't Do This" List (What to Avoid)
Once you have that pre-approval letter in your hand, do not change your financial life until the keys are in your pocket. Avoid these common pitfalls:
- Making "Big" Purchases: Do not buy a new car or finance furniture on credit. This increases your debt-to-income ratio and can kill your final approval.
- Changing Jobs: Lenders love stability. Switching careers mid-process is a major red flag.
- Co-signing for Others: Helping a friend get a car loan counts as your debt, too.
- Ignoring Closing Costs: Remember to set aside 1.5% to 4% of the purchase price for legal fees and land transfer taxes.
FAQ: Common Questions from Canadian Homebuyers
1. Does a pre-approval guarantee I will get the mortgage? No. It is a conditional commitment. The final approval depends on the specific property you choose (the lender will want an appraisal) and your financial situation remaining unchanged.
2. How long does the pre-approval last? Typically 90 to 120 days. If you have not found a home by then, you can usually ask your lender or broker to extend it, though they may need to refresh your credit check.
3. Will getting pre-approved hurt my credit score? A pre-approval requires a hard credit pull, which might dip your score by a few points. However, if you shop around with multiple lenders within a short window, credit bureaus typically treat it as a single inquiry.