4 tips for getting a mortgage pre-approval in Canada

By: Sandra MacGregor on January 27, 2026

In this article:

Get your documents ready
Understand and manage your debt ratios
Not a numbers person? Just multiply your combined family income by 5
Strengthen your credit score
Get some practical budgeting guidance related to your down payment

Getting pre-approved for a mortgage can be a daunting process. Many would-be homeowners walk into a bank or mortgage broker’s office without understanding the numbers that really make or break their chance of success.

However, there are ways to minimize your stress, frustration and confusion and increase your chances of getting approved.

Understanding how lenders look at your income, debt and credit score makes it much easier to get a strong pre-approval and avoid surprises later.

Here are four tips for getting a mortgage pre-approval in Canada.

KEY TAKEAWAYS:

Before meeting with a lender, gather all documents that support your financial picture, including tax returns, pay stubs, bank statements and more. They also help show the lender that you’re a diligent borrower.
Understand your debt-to-income ratio – lenders want to understand how much income can go towards your housing costs, after fulfilling your monthly debt obligations.
Your credit score is a key metric that lenders look to when qualifying mortgages – aim for a score of 680 or higher.
When shopping for a home, look for properties below the maximum amount that you’re qualified for. Instead, consider your day-to-day expenses, savings and retirement goals, and whether these obligations will affect your ability to pay off your mortgage.

Get your documents ready

Before a lender can pre-approve you, they need some key information about your finances. They’ll want to verify who you are, how much money you make and how much debt you are carrying. Coming in organized with all necessary documents in hand not only speeds up the pre-approval process, it also signals to the lender that you're an organized, detail-oriented borrower who is less likely to be low risk.

Ahead of meeting with lenders, gather documents like recent pay stubs, a letter of employment and your last couple of years of T4s or tax returns. If you are self-employed, your lender will want to see that you have a reliable form of income — you’ll need to have several years of Notices of Assessment, business financials and bank statements to show your income is stable.

Lenders will also want to see recent statements for any existing loans, lines of credit, credit cards, student loans and car payments.

Understand and manage your debt ratios

One of the key factors lenders look at when deciding to pre-approve a potential applicant is the Gross Debt Service (GDS) ratio and the Total Debt Service (TDS) ratio.

Gross debt service

The GDS is essentially a calculation of how much of your income would go to housing costs.

To arrive at a number, lenders will add up your expected monthly mortgage payment, property taxes, heating and half of your condo fees (where applicable).

They will then divide that amount by your gross (before-tax) monthly income to get your GDS ratio as a percentage of your income. For example, if your housing costs add up to $2,000 a month and your gross income is $5,000 a month, your GDS would be 40%. While every lender has unique requirements and risk tolerances, most want applicants to have a ratio of 39% or below (i.e. no more than 39% of your gross income will go to housing costs).

Total debt service

By contrast, the Total Debt Service (TDS) ratio looks at the bigger picture: it includes your housing costs as well as all your other monthly debt payments. Think car loans, student loans, lines of credit, credit card minimums and any child or spousal support you pay.

That amount is again divided by your gross monthly income to get a TDS percentage, which most lenders want to see at or below approximately 44%.

For example, let’s say your housing costs are $2,000 a month. On top of that, you pay $400 a month for a car loan, $150 in student loan payments, and $150 in credit card minimums, for total monthly payments of $2,700 (housing plus debt payments).

If your gross monthly income is $6,000, your TDS would be $2,700 ÷ $6,000, or 45%.

In that case, you’d likely need to either reduce your non-mortgage debts or look at a slightly lower-priced home to bring your TDS down closer to, or under, 44%.

Not a numbers person? Just multiply your combined family income by 5

While it’s important to understand what ratios lenders are looking for, applicants shouldn’t get bogged down by all those numbers, notes Leah Zlatkin, LowestRates.ca mortgage expert and chief operating officer and mortgage broker at Mortgage Outlet.

“Clients can feel intimidated if you start talking about formulas and ratios,” she says. “It’s too technical and feels overwhelming for most people.”

Instead, she offers a simpler rule of thumb: If your family has minimal debts, you can typically qualify for about four to five times your combined family income.

"If the combined family income is $100,000 and you have very few debts, you're probably going to be able to get a mortgage of $500,000 plus whatever you’ve saved for a down payment. Let’s say that’s $100,000. Then you can afford a home of $600,000," she says. “That math is really easy for people to compute."

Strengthen your credit score

Your credit score is another key metric lenders use to assess a mortgage pre-approval. Credit scores help lenders predict how likely you are to repay your debt on time.

In Canada, most traditional lenders look for scores of around 680 or higher. A higher score not only improves your chances of being pre-approved, it helps ensure you get the best rates possible because of your credit worthiness.

While there are alternative lenders out there who work with people with lower credit scores, they’re typically seen as stop-gap measures towards eventually securing a traditional mortgage. That’s because they charge higher interest rates and have less favourable terms to make up for the additional risk of non-payment they’ll be taking on when you have a lower score.

Zlatkin emphasizes that building good credit habits is essential, especially for newcomers to Canada or first-time home buyers.

“Consistent bill payments, responsible credit card use and paying balances in full where possible are key to building a strong credit profile for mortgage preapproval,” she says.

Even though Canadian lenders must apply the mortgage stress test (qualifying you at the higher of the Bank of Canada’s benchmark rate or your mortgage rate plus two percentage points) it is still crucial to do your own individual “stress test” on your housing budget and down payment amount.

Do the following to ensure you’re being realistic with your spending and housing projections:

A pre-approval shows the maximum a lender might give you, but that number may still not be an amount you feel comfortable living with once you factor in your real day-to-day spending. Before shopping for a property at the top of your pre-approved range, compare what your monthly payment would be and then add in the additional costs of essential spending—groceries, transportation, childcare, debt payments, savings—to check whether you still have room for emergencies and longer-term goals like yearly vacations and retirement plans.
Use an online affordability calculator to plug in different down payment amounts and home prices so you can see how slightly larger down payments or lower property costs can impact your monthly costs and debt ratios.

Lastly, Zlatkin repeatedly stresses using common sense and consulting a mortgage professional before making any big change to income or liabilities when you’re in the preapproval or closing window.

“Common sense and talking it over with a professional are key,” she says. “Speaking to a mortgage pro can help you better assess whether you’re getting yourself into trouble or not.”