Get approved before you fall in love with a house.
Mortgage pre-approval helps define a realistic price range before showings begin. It is not a guarantee of final financing, but it gives you a much clearer picture of what a lender may be prepared to approve.
What You Usually Need
- Government-issued identification
- Employment letter and recent pay stubs
- Recent Notices of Assessment / tax documents if self-employed or if the lender requests them
- Information about loans, credit cards and other debts
- Proof of down payment and source of funds
- Details of any property you already own
How the Stress Test Works
For uninsured mortgages at federally regulated lenders, OSFI’s current minimum qualifying rate is the greater of your mortgage contract rate plus 2% or 5.25%. This means you are tested at a higher rate than the rate you may actually pay.
Is There a Simple Income Multiplier?
No. A rule such as “$100,000 of income equals a $500,000 mortgage” is too simplistic. Approval depends on income, existing debt, property taxes, heating costs, condo fees where applicable, down payment, amortization, credit history and the qualifying rate.
Useful tools: FCAC Mortgage Calculator and OSFI minimum qualifying rate.
Best Next Step
Get the financing range first, then build your search around the payment and total monthly cost you are comfortable carrying.