Stage 2 of 10
Financing
Get a real pre-approval with a rate hold, and understand that it is a rate guarantee, not a promise to fund your specific purchase.
A pre-qualification is a conversation. A pre-approval is an underwritten review of your income, credit and down payment that holds a rate for 90 to 120 days. Neither one is a commitment to fund the house you eventually buy, because the lender has not seen the house yet. Knowing that difference is what stops you from waiving a financing condition you needed.
Your progress in this stage
0 of 6 ticked, 0% weighted. 3 critical tasks are still outstanding.
Weighted, not counted: a critical task is worth 5 optional ones.
Outstanding, and each one can cost you the deal
- Get a written pre-approval with a rate hold · Your broker
- Compare lenders on total cost over the term · You
- Understand what your down payment size changes · You
Work backwards from closing
Closing day is the only fixed date in a purchase. Give it to us and every outstanding task in this stage gets the date it has to be started by, using the slow end of each stage's range.
Anything from Aug 28, 2026 onwards. A closing sooner than a week away is not something a lawyer and a lender can complete.
Critical
Skipping one of these can cost you the house, the deposit, or five figures.
- CriticalYour broker5 days
Submit the full document pack and get back a letter stating the amount, the rate, the hold expiry and every condition. A verbal number from a branch is worth nothing when you are competing for a property.
- CriticalYou5 days
Rate is one input. Prepayment privileges, the penalty formula, portability, and whether the mortgage is collateral-charged all cost real money later. The cheapest rate with an interest rate differential penalty calculated on a posted rate can be the most expensive mortgage you could have chosen.
- CriticalYou1 day
Below 20% down the mortgage is insured, which means a premium added to your loan, provincial sales tax on that premium payable in cash at closing, and a maximum purchase price above which insurance is unavailable at all. It also means access to insured rates, which are lower.
Important
Skipping one costs money or leverage, not the deal.
- ImportantYou2 days
This is a question about your tolerance for payment change, not a forecast. Model both against your actual budget and pick the one whose worst case you can absorb.
- ImportantYou1 day
A longer amortization lowers the payment and raises lifetime interest substantially. A shorter term costs more per month and less overall. See both totals side by side before you sign, because the difference over the life of the loan is often larger than the down payment.
- ImportantYour broker3 days
A lenders are banks and large credit unions at the best rates. B lenders serve self-employed and bruised-credit borrowers at a premium plus a fee. Private and MIC lending is equity-based and expensive. Knowing your tier before you shop stops you from making offers you cannot fund.
What goes wrong at this stage
Each of these is common and each one costs money or a house. The consequence is stated in dollars or in what you lose, because a warning without a number is a warning people skip.
Believing a pre-approval means the lender will fund whatever you buy.
The lender has not appraised the property. If it appraises low, or it is a small condo, a co-op, or has a known issue, they can decline after you are firm. You lose your deposit and can be sued for the seller's loss.
Instead: Keep a financing condition on your offer until your broker confirms in writing that the specific property is approved, not just you.
Choosing a mortgage on the rate alone.
A posted-rate interest rate differential penalty on a five-year fixed can run to five figures if you break early, and roughly half of Canadians break their mortgage before term ends.
Instead: Ask every lender for their penalty formula in writing and compare on total cost including a realistic chance of breaking early.
Signing a collateral charge mortgage without knowing it.
Some lenders register the charge for more than the loan. Switching at renewal then costs legal and discharge fees instead of nothing, and your renewal becomes a negotiation you cannot walk away from, which is worth thousands to the lender over a five year term.
Instead: Ask directly whether the charge is standard or collateral, and what it will cost to switch at renewal.
Letting the rate hold expire mid-search.
You re-qualify at current rates, which can cut your budget by tens of thousands overnight and force you out of the market you were shopping in.
Instead: Diary the expiry date, and ask your broker to re-hold four weeks before it lapses.
What you sign and receive
A document marked binding commits you. Once it is signed you cannot change your mind without losing money, and in Ontario a resale purchase has no cooling-off period at all.
Pre-approval letter
States a maximum amount and holds a rate for a set window. It commits the lender to the rate, not to your purchase.
Mortgage commitment
The lender's approval of a specific property, listing every condition that must be satisfied before funds are advanced. This is the document that matters.
Signing this removes your ability to walk away without a cost.
You are finished with this stage when
- You hold a written pre-approval with an amount, a rate, a rate-hold expiry date and the conditions attached to it.
- You know which lender tier you are in and what it costs you if you are not in A.
- You know whether your down payment puts you above or below the insured threshold and what that changes.
- You have compared at least three lenders on total cost, not on rate alone.