How to Apply for a Mortgage in Canada: Step-by-Step Guide (2026)

Applying for a mortgage in Canada involves several steps — from reviewing your finances and gathering documents, through pre-approval, to final approval and closing. Knowing the full process helps you move quickly when you find a home.

Step 1: Review Your Financial Situation

Before approaching any lender, take stock of your finances:

Credit score: Check your credit report through Equifax or TransUnion. CMHC-insured mortgages need a score of at least 600 for one borrower; banks’ best rates usually need more. Lower scores may still work with B-lenders.

Income stability: Lenders prefer at least 2 years of employment history. Self-employed borrowers need 2 years of NOAs (Notices of Assessment from CRA) and financial statements.

Debt levels: For an insured mortgage, your GDS (gross debt service) ratio can’t exceed 39%, and your TDS (total debt service) ratio can’t exceed 44%. These ratios include your mortgage payment, property taxes, heat, and 50% of condo fees, as a percentage of your gross income.

Down payment: Minimum 5% of the first $500,000, 10% of the portion above that for homes under $1.5 million, and 20% for homes of $1.5 million or more. A down payment of 20% or more avoids mortgage default insurance.

Step 2: Get a Mortgage Pre-Approval

A mortgage pre-approval is a conditional commitment from a lender that you qualify for up to a certain amount. Pre-approval is separate from a pre-qualification, which is an informal estimate.

Benefits of pre-approval:

• Rate hold, usually 90–120 days (protects you if rates rise)
• Confirms your maximum purchase price
• Shows sellers you are ready to buy
• Identifies any issues early

To get pre-approved, you provide income documents, ID, and consent for a hard credit check. The lender reviews your file and issues a letter stating how much they will lend and at what rate (subject to property approval).

Step 3: Gather Required Documents

Self-employed applicants also need business registration documents, 2 years of business financial statements, and potentially a 12-month business bank statement.

Step 4: Complete the Formal Application

Once you have an accepted offer on a home, your lender opens a formal mortgage application. This includes:

• Mortgage application form (MLS-style info on the property)
• Property details and purchase price
• Down payment source confirmation
• Updated documents if any circumstances changed since pre-approval
• Property appraisal (usually ordered by the lender)

Your lender or mortgage broker submits the application to the underwriting team.

Step 5: The Stress Test

Insured mortgages, and uninsured mortgages from federally regulated lenders, go through the mortgage stress test. Lenders check that you could afford the payments at the greater of your contract rate plus 2% or 5.25%, a floor set by OSFI for uninsured mortgages and by the federal government's mortgage insurance rules (the Minister of Finance's Eligible Mortgage Loan Regulations) for insured ones.

The stress test reduces your maximum mortgage amount. Use our mortgage affordability calculator to see how this affects your purchasing power.

Step 6: Underwriting and Approval

The lender’s underwriter reviews your full file, the property appraisal, and your documents. This process typically takes 3–7 business days. The lender may come back with conditions — documents they need before final approval. Common conditions include:

• Updated pay stubs or employment confirmation
• A satisfactory property appraisal
• Proof that debts have been paid off
• Home insurance binder (proof of home insurance)
• Status certificate (for condos)

Once all conditions are cleared, you receive formal mortgage approval (the “commitment letter”).

Step 7: Review and Sign Mortgage Documents

Your lender sends the mortgage documents to your real estate lawyer (a notary in Quebec, and a lawyer or notary in BC). Your lawyer reviews the terms, explains the mortgage charge registered on title, and has you sign at a closing appointment — typically 1–3 business days before your closing date.

Step 8: Closing Day

On closing day, your lawyer receives the mortgage funds from the lender, pays the vendor, registers the title in your name, and hands over the keys. You pay the remaining closing costs at this point, which can include:

• Land transfer tax (provincial and municipal)
• Legal fees and disbursements
• Title insurance
• Mortgage insurance premium (if applicable, often added to the mortgage)
• Adjustments for prepaid property taxes or utilities

See the closing costs guide by province for estimates in each province.

Working with a Mortgage Broker vs. Bank

Brokers are often used when a situation is complex (self-employed, new to Canada, less-than-perfect credit, or a non-standard property), since they deal with more lenders.

Applying online vs in person

Common concerns about applying online

“What if I need to talk to someone?” Online brokers generally offer phone and video access to a licensed advisor, and some, such as True North, also have physical offices.

“Is my data secure?” Brokerages must follow federal privacy law (PIPEDA) or a provincial equivalent. Look for the lock icon in your browser and verify the URL matches the company’s official domain.

“Can I negotiate the rate?” Yes. Online brokers compete on rate, and a competing offer from another lender is often worth sharing; see the nesto review for one example of an online lender’s terms.

Key Takeaways

• Start with your credit score and income documentation before approaching lenders
• A pre-approval before house hunting holds a rate and gives sellers confidence
• The mortgage stress test cuts the maximum qualifying amount by about 17% at a 4.5% contract rate (25-year amortization)
• Final mortgage approval typically takes 5–10 business days once you have an accepted offer
• A mortgage broker compares rates from multiple lenders

Related: Mortgage Pre-Approval Guide · Documents Needed for a Mortgage · Mortgage Stress Test Explained · Home Buying Process Hub

Related pages

• If your mortgage application is denied