What it is, what it isn't, and how to get the strongest possible pre-approval
Pre-approval is the single most important step before house hunting — yet most buyers don't fully understand what it means. This guide explains exactly how it works, what lenders verify, and what can still go wrong after you have one.
Pre-qualification is a 10-minute online estimate based on self-reported numbers — it carries no weight with sellers. Pre-approval involves verifying your income, employment, credit score, and assets. A pre-approved buyer has a rate locked for 90–120 days and a confirmed borrowing limit. In competitive markets, sellers often won't accept an offer from a buyer without a current pre-approval letter.
Employment and income: T4s, Notices of Assessment (NOAs), and recent pay stubs for the past 2 years. Credit score: minimum 600 for insured mortgages; 680+ preferred for conventional. Debt ratios: GDS (gross debt service — housing costs divided by gross income) must be 32% or less; TDS (total debt service — all debts divided by income) must be 44% or less. Stress test: you must qualify at your offered rate plus 2%, or 5.25%, whichever is higher.
It is not a commitment to lend. The property itself must also be approved by the lender — they assess the home's value and condition. Your financial situation must remain unchanged: avoid new debt, job changes, or large purchases between pre-approval and closing. Rate holds expire — typically 90–120 days. If your purchase takes longer, reapply early.
Pay down existing revolving debt before applying — credit utilization above 50% hurts your score significantly. Avoid applying for new credit cards or loans in the 6 months before. Two or more years of consistent employment in the same field or industry is ideal. If self-employed, expect to provide 2 years of NOAs, T1 generals, and business financial statements. Work with a mortgage broker who can compare 20+ lenders simultaneously.
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Read All ReviewsThese guides are written for Canadian buyers, sellers, renters, and landlords and are kept current for 2026. They are for informational purposes only — not legal, tax, or financial advice. Rules vary by province; confirm details with your lawyer, accountant, or licensed real estate professional before making decisions.