Mortgage Pre-Approval in Ontario: A First-Time Buyer's Guide

Before you tour homes seriously, a mortgage pre-approval tells you what a lender may be willing to lend and, as a result, what price range to search in. For first-time buyers, it also turns a vague idea of your budget into a number you can plan around. Here is how pre-approval works in general, what lenders usually ask for and the pitfalls to avoid. We are REALTORS®, not lenders, so confirm the specifics with your bank or mortgage professional.

Pre-qualification vs pre-approval

The two terms are often used loosely, so ask what a given lender means.

• Pre-qualification is typically a quick estimate. You provide basic information about income, debts and savings, and you get a rough idea of what you might borrow. It usually involves little or no document review.
• Pre-approval is a more thorough process. The lender reviews your documents and credit information and gives you a maximum mortgage amount, often with a rate they will hold for a set period if you buy within it.

Neither is a final approval. The final approval comes after you have an accepted offer, when the lender reviews the property and your updated documents.

Documents lenders typically ask for

Requirements differ by lender, but you can expect to be asked for documents like these:

• Government-issued photo identification
• Proof of income, such as recent pay stubs and a letter of employment
• Tax documents, such as notices of assessment and T4 slips; self-employed buyers are often asked for more
• Bank statements or other records showing your down payment savings
• Information on your debts, such as credit cards, car loans and student loans
• Details on any gift toward your down payment, which lenders often ask to see documented

Start collecting these early. A tidy folder makes the process faster and shows you what the lender will see.

The stress test

Lenders do not just look at today’s rate. For uninsured mortgages, the Office of the Superintendent of Financial Institutions (OSFI) sets a minimum qualifying rate that federally regulated lenders must use: the greater of the mortgage contract rate plus 2% or 5.25% (OSFI). OSFI’s page, last modified in January 2026, says the rate is reviewed at least once a year. In practical terms, you qualify at a higher rate than the one you will actually pay, so your maximum mortgage is lower than a simple payment calculation might suggest. Insured mortgages are governed by a rate set by the Minister of Finance, and your lender can tell you which applies to you.

Down payment and insurance affect the answer

Your down payment influences the type of mortgage and the amount you can borrow. The minimum down payment in Canada is 5% on the first $500,000 of the price and 10% on the portion from $500,000 to $1.5 million, and at $1.5 million and above it is 20%. If your down payment is under 20%, you generally need mortgage default insurance. We cover this in our down payment and CMHC guide, and the programs that can help you save in our first-time buyer guide, including the First Home Savings Account and the Home Buyers’ Plan.

How rate holds work, in general

Many pre-approvals come with a rate hold, meaning the lender will offer a particular rate for a set period if you complete your purchase in that window. Things to ask:

1. How long does the hold last?
2. What happens if rates fall during that time?
3. Does the hold apply to every product, or only some?
4. What can void the pre-approval, such as a job change or a new debt?

We are not quoting any current rates here, because they change and vary by lender. Get a written copy of what you are being offered.

Protect your approval while you shop

Between pre-approval and closing, avoid anything that changes the picture the lender saw:

• Do not take on new debt, such as a car loan, or make large purchases on credit.
• Do not change jobs without talking to your lender first.
• Do not move large sums of money around without records; lenders want to trace where your down payment came from.
• Pay all your bills on time.

Budget beyond the mortgage

Your maximum mortgage is not the same as a comfortable budget. Include property tax (see our London property tax guide), heating, insurance, maintenance and the closing costs you will pay, such as Ontario land transfer tax. Our land transfer tax guide shows the brackets, with a $400,000 example of $4,475 and a refund of up to $4,000 for eligible first-time buyers. Your lawyer will handle the closing and will tell you the exact costs for your purchase.

Using pre-approval in your search

A pre-approval helps you search realistically and show a seller you are serious. It does not mean you have to spend the maximum. Compare areas using sourced figures: our September 2026 market report and questions to ask before making an offer are good starting points. When you are ready to look at homes, read the buyer guide, and ask us for recent comparable sales in the areas you like. Conditions in an offer, including any financing condition, are set in the Agreement of Purchase and Sale; ask your lawyer.

Talk to us

We can connect you with the questions to ask a lender and help you turn a number into a search plan. Contact us or start with the buyer guide.