September 15, 2026

How to get pre-approved for a mortgage

How much can I borrow to buy a home? This is one of the first questions to ask yourself when a real estate project starts to take shape.

A mortgage pre-approval provides an initial answer. A lender evaluates your income, debts, down payment, and credit history to determine how much you can borrow to purchase a property.

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But how does mortgage pre-approval work? What documents do you need to provide? Is loan approval guaranteed? Here’s what you need to know to start your home search with a clear idea of your borrowing capacity.

	At a glance Mortgage pre-approval is an assessment of your financial situation to estimate your maximum mortgage amount. It helps you understand your borrowing capacity and, depending on the lender’s terms, lock in an interest rate for a set period. Mortgage pre-approval is generally valid for 60 to 130 days. However, it does not guarantee final loan approval; your financial situation, the property you choose, and other conditions must be confirmed before funds are disbursed.

What is a mortgage pre-approval?

A mortgage pre-approval is an assessment of a borrower’s financial situation by a lender to determine the maximum amount of a mortgage loan. Although optional, this step helps you establish a budget for your purchase before you start looking for a property, though it does not guarantee that you will receive the loan.

You may hear terms like “prequalification,” “preauthorization,” and “mortgage approval,” which refer to different levels of verification.

Differences between mortgage prequalification, pre-approval, and approval
	Mortgage prequalification	Mortgage pre-approval or preauthorization	Mortgage approval
Purpose	Provides an initial estimate of your borrowing capacity	Guarantees your mortgage eligibility and the amount you could qualify for	Confirms financing for a specific property
Possible checks	Analysis of financial information provided by the borrower	Analysis of income, debt, assets, credit history, and other financial information	Analysis of financial situation, selected property, and loan terms
Interest rates	Offers no protection against rising interest rates	Offers protection against rising interest rates for 60 to 130 days, depending on the lender	Establishes the rate and terms based on the financing agreement
Loan guarantee	Does not guarantee that the loan will be granted	Does not guarantee that the loan will be granted	Determines the loan terms once all conditions are met

Note: Terminology, analyses, and terms may vary by lender. Mortgage prequalification is generally not required if you apply for pre-approval.

Does the pre-approved amount represent your budget?

The pre-approved amount is an indicator of your borrowing capacity, but other factors can influence whether you qualify for or can renew a loan.

Your budget should include the mortgage pre-approval amount, closing costs, maintenance costs, and a buffer for unexpected expenses. For example, with a mortgage pre-approval of $600,000, you could qualify for a loan in that amount, but your budget might lead you to opt for a less expensive property.

Once you’ve established your budget, compare financing options to find the mortgage that’s best for you.

Why get a mortgage pre-approval before looking for a property?

Getting a mortgage pre-approval helps you better prepare for a home purchase. It lets you know your borrowing capacity and helps you focus on properties that fit your financial situation.

Pre-approval also demonstrates to the seller that the buyer is serious, since they have already taken steps to secure financing, which can be a significant competitive advantage in certain more competitive markets.

However, pre-approval remains a preparatory step: it does not replace mortgage approval or the financing procedures outlined in the offer to purchase. Once a property has been selected, the lender must still confirm the financing based on the specifics of the transaction and the applicable terms.

What criteria determine the amount of a mortgage pre-approval?

A mortgage pre-approval is based on several aspects of your financial situation. Here are the main criteria that can influence your eligibility and the mortgage amount you may qualify for.

Income and financial stability

A high income does not guarantee mortgage pre-approval. The lender evaluates your overall financial situation and your ability to repay the loan over the long term. They consider all your sources of income—whether from a salaried job, self-employment, commissions, or, in some cases, rental income—as well as your job stability.

Available down payment

The down payment is the amount you contribute toward the purchase of a property. It can come from various sources, such as your savings, a FHSA, an RRSP under the Home Buyers’ Plan ( HBP), or a gift from family.

In Canada, the minimum down payment is 5% to 20% of the home’s purchase price. If it is less than 20%, you’ll need to purchase mortgage loan insurance from an insurer, such as CMHC.

Credit score and financial history

Your credit score and financial history show how you manage your financial obligations. Credit utilization, payment habits, late payments, and certain events—such as bankruptcy—all influence the assessment of your credit history.

A good credit history makes it easier to secure financing and qualify for favourable mortgage rates. If your credit history could use some improvement, know that you can improve your credit score before applying.

Debt-to-income ratio

The lender takes into account your debts and financial obligations—such as a car loan, a line of credit, credit card balances, or a student loan—to calculate your debt-to-income ratio. This is also referred to as the “debt ratio” or “debt-to-equity ratio.” It is an essential tool for preventing excessive debt and managing your finances effectively.

A high ratio indicates a significant amount of debt relative to your assets. A low ratio means less debt and a more stable financial situation.

How do you calculate the debt-to-income ratio?

When calculating debt repayment, two ratios are used to determine whether the borrower has sufficient income:

The Gross Debt Service (GDS) includes all housing-related debts. These expenses (mortgage, taxes, condominium fees, heating) should not exceed 39% of the household’s gross annual income and should ideally fall between 30% and 32%.
The Total Debt Service (TDS) includes all debts, such as credit card balances, mortgages, auto loans, and personal loans. The total of these payments should not exceed 44% of the household’s gross annual income and should preferably fall between 37% and 40% to allow you to maintain a financial buffer.

Gross Debt Service (GDS) indicators
Ratio	Level	Description
Less than 30%	Healthy	Indicates good financial flexibility
Between 30% and 40%	Acceptable	Requires vigilance and monitoring of expenses
Over 40%	At risk	Leads to difficulty borrowing and a risk of excessive debt

Note: The thresholds presented above are provided for informational purposes only. They may vary depending on the borrower’s and lender’s circumstances. Whether your mortgage is insured or not may also affect the calculation of the recommended ratios.

The amount of the loan requested and the stress test

The lender must assess whether you will be able to continue making your mortgage payments if market conditions change. To do this, the lender uses the mortgage stress test, which confirms your ability to repay your mortgage at the higher of the following rates: the rate in your loan agreement plus 2%, or the Bank of Canada’s 5-year fixed rate.

This explains why the amount you qualify for is sometimes lower than what you had anticipated.

Interest rates and market conditions

Interest rates influence the cost of your financing and your mortgage payments. Consequently, a change in rates can affect your purchasing power and the amount you can borrow.

A mortgage pre-approval typically includes a rate lock for a set period. This protects you if rates rise while you’re house hunting. Conversely, if they fall, you’ll be able to take advantage of lower rates. However, the terms may vary depending on your lender and your financial situation.

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The type of property in question

A single-family home, a condo, a duplex, or an investment property each have different characteristics and risks. As a result, the property’s value, its condition, the income it could generate, and the associated expenses may be taken into account when evaluating your application.

Even if you’ve received mortgage pre-approval, it’s essential that your financial situation and the property you’ve chosen meet the criteria for final approval. It’s therefore recommended that you maintain a stable financial situation and consult your lender before making any significant changes to your income, debts, or credit usage.

	Tips and tricks Talk to your lender early in the process if you’re considering purchasing a property that requires major renovations.

How to get a mortgage pre-approval?

To apply for a mortgage pre-approval, you can contact a bank, a credit union, a cooperative credit institution, or a mortgage broker. Before you begin, gather the information and documents needed to assess your financial situation, such as your income, assets, and credit score.

Since eligibility criteria, interest rates, products, and financing terms vary from one lender to another, take the time to compare several options to better identify the solutions that are right for you.

Once you’ve obtained your pre-approval, you’ll have a financial benchmark to guide you as you begin the process, while remaining objective in your search for a property.

What documents do you need to provide to apply for mortgage pre-approval?

The required documents may vary depending on your situation and the lender you choose. Generally speaking, the lender will seek to obtain a complete picture of your income, assets, and financial obligations.

Documents required for mortgage pre-approval
Type of information	Information requested	Reason
Identity	Previous and current addresses Photo ID	To verify your identity
Income	Recent pay stubs Employment records T4 slip Notice of assessment Proof of commissions Tax return (self-employed)	To assess your income and its stability
Assets and down payment	Bank statements RRSP TFSA FHSA Other proof of funds’ source	To verify the funds available for your project
Financial obligations and debt level	Child or spousal support Housing costs (property tax, condo fees, heating costs) Loans (student, auto, etc.) Line of credit Credit cards Other financial obligations	To analyze your debt level
Credit history	Consent to review your credit report	To review your credit utilization and credit history
Property in question	Property information (if known)	To determine the property’s characteristics based on the requested financing

If you are self-employed, receive commissions, or have multiple sources of income,the lender may request additional documents.

What are the processing times?

Once you have gathered the necessary documents, your financial institution or mortgage broker will review your application. Processing times vary depending on the lender and the complexity of your application.

If your application is approved, you’ll receive a letter or confirmation stating the maximum amount you’re eligible for and the applicable terms. Mortgage pre-approval is generally valid for 60 to 130 days, during which time you’ll benefit from a rate lock.

How a mortgage pre-approval application affects your credit score

When evaluating a mortgage pre-approval application, the lender may run a credit inquiry, which can affect your credit score. These inquiries are recorded on your credit report for up to 36 months. However, several applications for the same type of loan within a specific time frame generally count as a single inquiry.

What questions should you ask during the pre-approval process?

Obtaining a mortgage pre-approval is the first step. To fully understand what’s being offered to you, review the financing terms, such as the amount, interest rate, validity period, and conditions that must be met.

What is the interest rate being offered?

Ask what interest rate is associated with your pre-approval and what the terms are. Is it a fixed or variable rate? Is the rate guaranteed for the duration of the pre-approval, or can it change before the purchase?

If you’re considering a fixed mortgage rate, it may be helpful to compare the different terms offered. However, your choice shouldn’t be limited to the advertised rate—you should also consider the loan terms and your financial situation.

What should you do if you don’t find a property during the pre-approval period?

Pre-approval is a form of commitment from the lender that is generally valid for 60 to 130 days. It can be extended, but this requires an update to your file or a new review of your financial situation, including your credit.

You’ll need to provide new pay stubs, updated bank statements, or proof that your down payment hasn’t changed. If interest rates have risen, your borrowing capacity or estimated monthly payments may change.

What circumstances can invalidate a pre-approval?

Certain changes in your financial situation can affect your eligibility for financing. For example, a change in employment, a decrease in income, or an increase in your debt will impact your application. The same applies to late payments and a decline in your credit score.

Before submitting an offer to purchase, inform your lender or mortgage broker of any changes. This will help you understand the impact on your financing and adjust your plans as needed.

	Tips and tricks A real estate broker can help you look beyond the purchase price and anticipate costs that your mortgage financing may not necessarily cover, such as closing costs, moving expenses, and certain maintenance or renovation costs.

Mortgage pre-approval: key points to remember

A mortgage pre-approval gives you an idea of your borrowing capacity and helps you narrow down your search. It shows sellers that you’re serious and that you’ve already started the financing process.

Be sure to fully understand the terms and conditions associated with it, keeping in mind that the amount indicated is not a guarantee of final financing approval. Your financial situation and the property you’ve chosen will be reviewed before the loan is granted.

Finally, comparing financing options, rates, and terms will help you choose the mortgage that best suits your needs. Our mortgage calculator can help you explore different scenarios and get a clearer picture of your monthly payments. Once your mortgage borrowing capacity has been determined, you can continue your search with a better idea of your exact budget.

Ready to take the next step? Discover properties for sale on Centris.ca.

Frequently asked questions

1. Does a mortgage pre-approval guarantee that you’ll get the loan?

No. A mortgage pre-approval does not guarantee that you’ll get the loan. It indicates the amount you may be eligible for based on the information and documents you’ve provided. Once you’ve chosen a property, the lender will still need to confirm that the financing conditions are met.

2. Can you switch lenders after obtaining pre-approval?

Yes. A pre-approval generally does not require you to choose the lender that issued it. You can compare other offers before making a decision. However, switching lenders may result in a new application review or different terms.

If you switch lenders after signing your mortgage contract, you may have to pay a penalty, known as a prepayment penalty.

3. How long does it take to get a mortgage pre-approval?

Getting a mortgage pre-approval can take a few business days if the application is complete and your financial situation is clear. However, the process may take longer if the lender needs to conduct additional verifications—for example, for self-employed individuals, those with multiple sources of income, or those with a complex financial situation. To speed up the process, provide all the required documents.

4. Is pre-approval free?

Mortgage pre-approval is generally free, but terms vary depending on the lender and the service used. Financial institutions and mortgage brokers do not charge any fees for their services.

5. What should you do if the lender denies your loan application?

A lender may deny a mortgage even after pre-approval. This may be due to a change in your financial situation or the characteristics of the property you’ve chosen. In this case, you could increase your down payment, accept a higher interest rate, or add a co-signer to the loan.

The information provided in this article is for informational purposes only and does not constitute financial, legal, professional or other advice or opinions. As such, we make no warranties, express or implied, as to the accuracy, reliability, integrity or exhaustiveness of this information, which you use at your own risk. In no event shall Centris be held liable for actions made on the basis of the information contained in this article or for any damage or loss, direct or indirect, that may result from, or in connection with, the use thereof. We recommended consulting with industry professionals for personalized advice before making any decisions.