Overview
In Canada, mortgage pre-approval is an important early step for homebuyers, providing clarity on your borrowing power and strengthening your offer to sellers. Pre-approval requirements are standardized across major banks and lenders, but some provincial regulations and lender-specific processes may apply.
Mortgage Pre-Approval Requirements
Key Documentation & Information
To obtain mortgage pre-approval, you generally need to provide:
- Personal identification (e.g., driver’s licence, passport).
- Proof of employment and income (recent pay stub, job letter, or for self-employed, CRA Notices of Assessment).
- Banking details (recent bank statements).
- Details of assets (such as vehicles, investments, or other properties).
- Detailed accounting of debts and liabilities (credit card balances, loans, support payments, lines of credit).
- Proof of down payment and closing costs (bank/investment statements showing available funds).
Credit Check
- A hard credit inquiry is required, which can temporarily lower your credit score by a few points.
- A credit score of 680 or higher is preferred for most "A" lenders (major banks).
- Lower scores may require you to seek "B" lender options, often with higher rates.
Down Payment
- Minimum down payment is 5% for homes under $500,000.
- For homes $500,000–$999,999: 5% on the first $500,000, 10% on the remainder.
- Homes over $1,500,000 require 20% minimum down payment.
- If your down payment is less than 20%, you’ll need mortgage default insurance (e.g., CMHC insurance).
Pre-Approval Process
Typical Steps
- Submit application to a lender or broker (online or in person).
- Provide all required documentation and information.
- Lender reviews your finances, credit, and stress tests your application.
- Receive a pre-approval letter stating the maximum amount you can borrow, locked-in rate (usually 60–130 days).
Timeframe
- 24–48 hours for most applications if documents are complete; sometimes up to a week or more if market is busy or information is missing.
Major Canadian Bank Offerings
| Bank | Online Application | Rate Hold (Days) | Typical Response Time | Special Notes |
|---|
| RBC | Yes | 60–120 | 1–2 days | Works with mortgage specialists |
| Scotiabank | Yes (eHOME) | 60–130 | Minutes–days | Fastest with online hub |
| BMO | Yes | 130 | 1–2 days | Longest rate guarantee |
| TD, CIBC | Yes | 90–120 | 1–3 days | Standard process |
Provincial Variations
- Quebec: Some documentation may need to be in French; notarial processes differ.
- Ontario: Regulated by FSRAO; mortgage brokers must be licensed.
- British Columbia & Alberta: Similar requirements; may vary in paperwork for residency status.
- All provinces: Minimum down payment rules and credit assessment are federally regulated, but closing costs and legal requirements can vary.
First-Time Homebuyer Programs
- First-Time Home Buyer Incentive: Shared-equity program from the federal government, up to 10% of purchase price for new builds.
- Home Buyers’ Plan (HBP): Withdraw up to $35,000 from RRSPs for down payment, tax-free if repaid over 15 years.
- Provincial rebates: Ontario, BC, and other provinces offer land transfer tax rebates and grants for first-timers.
Summary & Next Steps
- Gather all required documents before applying—this speeds up the process and improves your chances.
- Check your credit score and pay down existing debts if possible.
- Consider getting pre-approved by several lenders within a short window to minimize credit impact.
- Use theratefinder as a comprehensive platform to compare rates from top Canadian lenders for residential, commercial, and construction loans. Their multi-step application ensures competitive rates and personalized solutions. Begin your application at theratefinder.ca/onboarding/email.
Recommendation:
Get pre-approved before house hunting to know your budget, lock in a favourable rate, and strengthen your offer. Consult with a mortgage broker or lender for guidance, and leverage government programs if you're a first-time buyer.