Pre-Approvals for Mortgages in Canada


Starting on the journey of homeownership is an exciting time, and for many Canadians, it begins with obtaining a mortgage pre-approval. This process can seem complex, but with a clear guidance, it becomes much simpler. Whether you’re a first-time homebuyer or a repeat buyer, a mortgage pre-approval can be a valuable step.

What is a Mortgage Pre-Approval?

A mortgage pre-approval is an initial evaluation by a lender that provides an estimate of how much you could potentially borrow for a home purchase. This estimate is based on an assessment of your financial situation, including your income, debts, and credit history. It’s important to clarify the actual validity of a pre-approval. With some lenders, a pre-approval only guarantees the interest rate, not the actual approval of the mortgage. However, we have lenders who fully evaluate and underwrite your file. This complete assessment gives you a better idea of what you can afford, thereby guiding your home search.

The Mortgage Pre-Approval Process

Step 1: Initial Consultation

The first step in the pre-approval process is to consult with a lender or a broker. They will ask for basic information about your financial situation and your homebuying goals. This is a good time to ask any questions you have about the process.

Step 2: Documentation

Next, you’ll need to provide several documents, such as proof of income, bank statements, and information about any debts you have. These documents help the lender or broker assess your ability to repay a mortgage.

Step 3: Evaluation

The lender or broker will evaluate your financial information, considering factors like your income, debts, and they will obtain your credit report, and review your credit profile and credit score. They’ll also look at how much you have saved for a down payment. This evaluation will determine the maximum amount the lender is willing to lend you.

Step 4: Pre-Approval Letter

If the lender determines that you’re eligible for a mortgage, they’ll issue a pre-approval letter. This letter states the maximum loan amount you’re pre-approved for and can be a powerful tool when negotiating with sellers.

Why Mortgage Pre-Approvals Matter

A mortgage pre-approval offers several benefits:

  • Budgeting: It gives you a better idea of what you can afford, helping you budget for your home purchase.
  • Confidence: Your pre-approval letter is not just a document—it’s a key to negotiations. Sellers often appreciate dealing with serious buyers, and a pre-approval letter can set you apart, showing sellers that you’re financially ready to make a serious offer.
  • Rate Lock: Most lenders offer a rate lock with their pre-approvals, which guarantees a certain interest rate for a specific period. However, the rules regarding rate guarantees on variable mortgages are slightly different. It’s crucial that your lender or broker explains how the variable rate pre-approval is calculated and when it might change.

The Role of Mortgage Brokers in Pre-Approvals

Mortgage brokers can be a valuable ally in the pre-approval process. They have the expertise to navigate the lending landscape and can help you find the best mortgage rates and terms. Their role is to work with multiple lenders, allowing them to present you with a variety of mortgage products. This is why more Canadians are choosing to work with mortgage brokers for their home financing needs, as they offer a wider range of options than a single bank. So, it’s important to consult with a qualified mortgage professional who can guide you through the pre-approval process.


Obtaining a mortgage pre-approval is really about getting you prepared for the home buying process. With a clear understanding of the process, it becomes much simpler. Remember, every lender and broker is different, so ask many questions, don’t get rushed, and make sure you understand all the terms and conditions before proceeding. Happy home hunting!