What does a financing condition protect me from in an Ontario home purchase?

A financing condition — sometimes called a "condition on financing" or "mortgage condition" — gives you a set period (typically 3–7 business days) after offer acceptance to secure a satisfactory mortgage commitment from a lender. If your financing falls through within that window, you can notify the seller that the condition was not met, and the deal ends with your deposit returned.

Without this condition, you are obligated to close even if your lender does not approve your mortgage. That can leave you unable to close, potentially losing your deposit and facing a lawsuit for damages.

A mortgage pre-approval before making an offer is helpful but is not the same as a final lender commitment. Pre-approvals are conditional on the specific property appraising at the purchase price, the finalization of your employment and income verification, and the lender's final underwriting. The financing condition gives you time to convert that pre-approval into a firm commitment. Do not waive this condition unless you have a confirmed, unconditional mortgage commitment in hand.