The dos and don'ts of getting a mortgage pre-approval

This post was originally published on February 9, 2021, and was updated on October 15, 2025.

Becoming a homeowner is a quintessential part of the Canadian dream; about 66.7% of Canadians lived in owner-occupied homes as of 2023. And because your home often becomes your most significant financial asset, stepping into the real estate market means making informed moves — starting with mortgage pre-approval. Before hiring a realtor or browsing listings, secure your pre-approval so you know exactly how much you can borrow without overextending your budget. Here’s what you should know about the mortgage pre-approval process, whether you’re a first-time home buyer in Canada, or renewing your existing mortgage.

5 mortgage pre-approval tips (the dos)

A strong mortgage pre-approval can save you time, money, and stress. Here are five essential tips to help you get it right from the start.

1. Apply for a mortgage pre-approval first

It’s common for first-time buyers to start the home search by calling a real estate agent, but your very first step should be getting a mortgage pre-approval. It tells you exactly how much you can borrow based on your income, existing debt, and credit profile — helping you set a realistic price range before you start viewing homes. It also shows sellers you’re a serious, qualified buyer, which can make your offer more competitive.

A pre-approval also confirms your maximum loan amount and shows how your mortgage will perform under Canada’s mortgage stress test (which requires you to qualify at your contract rate plus 2%, or the benchmark rate — whichever is higher). While you can use a mortgage affordability calculator to estimate your budget, a pre-approval formalizes it with verified financial data. If you have your documents ready, like proof of income, identification, and debt statements, a pre-approval can often be completed within a few hours.

2. Shop around for a great pre-approval rate

Just as you’ll see several homes before settling on ‘the one’, you should shop around for the best mortgage rate. Don’t just go to your local bank branch and expect to receive a great deal. Do your research and compare mortgage rates, or use a mortgage broker who will negotiate on your behalf.

Even half a percentage point can make a huge difference in your regular payments and the amount of interest you’ll pay over time. To see what we mean, plug your numbers into our mortgage payment calculator, then change the interest rate in small steps. You’ll very quickly see the difference!

What happens after your mortgage pre-approval? Generally, you’ll have a 90- to 120-day period where your offered rate will be held for you. This is when you should begin house-hunting!

3. Assemble your documentation

Getting your paperwork ready early will make the pre-approval process much smoother. Lenders need to verify your identity, income, assets, and debts to confirm how much you can borrow, so it’s best to gather everything in one place before applying.

Here’s a typical list to get you started:

• Identification: Government-issued photo ID to confirm your identity.
• Bank and investment statements: Recent statements showing you have enough funds for your down payment and monthly payments.
• Proof of assets: Documentation for assets like vehicles, secondary properties, or other investments that help determine your overall net worth. 
• Proof of income: Recent pay stubs or a letter from your employer. If you’re self-employed, your most recent Notice of Assessment will usually be required.
• Information about your debt: Details on credit cards, car loans, student loans, or other liabilities. Be transparent because lenders will review your credit history and existing obligations.

4. Understand your rate hold

When you’re pre-approved, your lender typically includes a rate hold — a guarantee that your quoted mortgage rate will stay the same for a set period, usually 90 to 120 days. This protects you if interest rates rise while you’re house-hunting, giving you time to make an offer with confidence. However, many borrowers don’t realize that a rate hold isn’t always one-sided. If rates fall during your hold period, your mortgage broker can often re-negotiate to secure a lower rate before closing. 

5. Read the fine print

Once you’re pre-approved, your lender or broker will provide a pre-approval document outlining your estimated loan amount, interest rate, term, and mortgage type. It might look straightforward, but it’s worth reading carefully before signing anything. This is your chance to confirm that the rate, term length, and mortgage type truly fit your financial goals and risk comfort.

It’s also important to review how long your rate hold lasts (usually 90–120 days), what conditions apply, and whether any fees or restrictions are included. If you’re unsure about any details, have your mortgage broker walk you through the terms, or ask a lawyer or accountant to review the document.

Mortgage pre-approval mistakes (the don’ts)

Getting a mortgage is a financially sensitive time; it’s important to avoid any major decisions that could change your profile as a borrower. This could void the pre-approval you previously received from your lender.

Here are five rules that, if you stick to them, will help you achieve pre-approval success.

1. Don’t get pre-approved over your budget

Your pre-approval amount represents the maximum a lender is willing to offer — not necessarily what you should spend. Before you start house-hunting, calculate how much you can comfortably afford each month, factoring in property taxes, utilities, insurance, and maintenance costs. That number should guide your purchase price, not the upper limit on your pre-approval.

For example, a buyer might request a pre-approval for $250,000, but the lender can approve them for $300,000, suggesting they have “wiggle room.” While this may seem like a bonus, it can lead to overspending and financial strain. Just because a lender offers a higher amount doesn’t mean it fits your long-term budget.

2. Hold off on major purchases

Once your pre-approval is in place, avoid making large purchases, such as a new car, furniture, or major appliances, until after your mortgage closes. Even if you can pay them off later, new debt can change your debt-to-income ratio and make you look riskier to lenders.

For instance, if you buy a car on financing between pre-approval and closing, that new loan increases your monthly obligations. When your lender reassesses your finances, your original pre-approval amount could be reduced or even revoked. Keeping your spending consistent ensures your financial profile matches what your lender approved, reducing the risk of surprises at closing.

Avoid applying for new credit cards, personal loans, or lines of credit during your pre-approval period, and never co-sign a loan for someone else. Every credit inquiry or new account can lower your credit score slightly and increase your total available credit, which may signal higher financial risk to lenders. Also, make sure to review your credit report for accuracy before applying; fixing errors early can improve your pre-approval outcome.

Also read: How your credit score affects your mortgage

4. Don’t quit or change jobs

Finally, try to avoid changes to your employment status after you’ve been pre-approved. Steady and predictable income is crucial to most mortgage applications. Changing jobs or becoming self-employed will most likely throw a wrench into the mortgage approval process. Instead, if possible, hold off changing employers or starting a company until after you have the keys to your new place. If you have a job offer that's just too good to pass up, you can learn more about how to handle changing jobs while house-hunting without necessarily jeopardizing your pre-approval. 

If the worst should happen, and you are fired or made redundant, it’s probably a good idea to delay buying a home until you regain financial stability.

5. Don’t forget about closing costs

It’s easy to focus on your down payment and mortgage amount, but many first-time buyers underestimate how much they’ll need for closing costs. These are the one-time fees you’ll pay when your home purchase is finalized — typically 1.5% to 4% of the purchase price — and they’re not included in your mortgage.

On a $600,000 home, you could owe between $9,000 and $24,000 in closing costs. This includes legal fees, title insurance, land transfer tax, and home inspection fees. Setting aside funds for closing costs ensures you’re not scrambling for cash at the last minute or dipping into your down payment. 

The bottom line

As with many things in life, planning ahead makes all the difference. After all, getting a mortgage pre-approval is its own form of forward planning! Take the time to get your finances in order before you apply for a mortgage pre-approval, shop around for the best rate and keep your finances consistent. Achieve that, and you should expect a seamless transition from pre-approval to your move-in date.

Also read:

• • Can you afford a million-dollar home?
  • Should you spend the full amount of your mortgage pre-approval?
  • OSFI drops stress test requirement for mortgage renewal switches
  • The trigger rate: Everything you need to know
  • Mortgages and inflation: How do they affect each other?
  • The new Tax-Free First Home Savings Account