Mortgage pre-approval
Bank or broker. No single canonical form. Bring two years of T4s or T1s, current pay stubs, list of debts, down payment proof of funds.
Stage · Buying your first home in Canada
Getting pre-approved
This is where your real buying ceiling is decided. Lenders run GDS and TDS ratios and apply the stress test. Province matters less here; credit profile matters most.
What to do this week
- Pull your credit report. Dispute errors before you apply. Pay down credit card balances to under 30% utilization for a quick score lift.
- Collect two years of income documentation. If you are self-employed, expect lenders to average two years of net business income.
- Get pre-approved by at least two lenders. A mortgage broker hits multiple lenders with one application.
What to avoid
- Opening new credit in the 90 days before application. A new hard inquiry or credit card drops your score at the worst time.
- Anchoring on the pre-approval maximum. Lenders approve what you can technically carry, not what leaves room for life.
- Skipping the stress test math. You must qualify at your contract rate plus 2% or 5.25%, whichever is higher.
Calculators for this stage
Forms to file at this stage
Frequently asked
How long does mortgage pre-approval last?
Usually 90 to 120 days, depending on the lender. Your rate hold runs on the same clock. If you have not made an accepted offer before expiry, you start over with updated documents.
Does pre-approval hurt my credit score?
One pre-approval triggers a hard inquiry, which drops your score by a few points for a few months. Multiple pre-approvals within about 14 days are often grouped as one inquiry by the scoring model.
Do I need to pass the stress test with a credit union?
No. Provincially regulated credit unions are not bound by the federal stress test rule. They apply their own affordability metrics, which are often similar but not identical.
What is the difference between GDS and TDS?
GDS (gross debt service) measures housing costs against income, capped around 39%. TDS (total debt service) adds all other debts, capped around 44%. Both limits must be met for most insured mortgages.
Next stage
Making an offer →