What a lender is actually checking
A lender looks at four things: income, existing debt, credit history and the size of your down payment. Federally regulated banks apply a qualifying rate under the Office of the Superintendent of Financial Institutions' underwriting guideline, testing your ability to pay at a rate higher than the one you will actually be charged. Credit unions and private lenders are not bound by that specific guideline, though many apply something similar of their own.
None of this is set by statute the way a court deadline is; it is each lender's own underwriting practice, so two lenders can reach different answers on the same file.
Broker or bank, and who each one works for
A mortgage broker or agent is licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006 and must disclose material risks, the cost of borrowing and any conflict of interest, including their own compensation. A bank's own representative works for the bank, not for you, and has no equivalent duty to compare products across lenders.
Either route can end in the same place: a written commitment letter setting out the amount, the rate, the term and any conditions. Read it in full before signing, and send it to your lawyer as soon as you have one.
The commitment letter and its conditions
A commitment is not final until its conditions are satisfied: usually an appraisal, proof of income or down payment, and confirmation of mortgage default insurance if your down payment is small. Some conditions are yours to meet; the appraisal is the lender's.
Commitments carry an expiry date. If closing moves past it, the lender is not bound to keep the same terms, and renewing the commitment can change the rate offered.
Where the lawyer's work begins
We do not choose your lender or negotiate your rate. Once a commitment exists, we review its terms, confirm what it requires of you, search title, and prepare the mortgage documents the lender's instructions set out. We report to the lender as well as to you, because on most files the lender is also our client for the loan itself.
Anything in the commitment you do not follow is worth raising before you sign it, not at the lawyer's office days before closing.
Your steps
Who's involved
Assesses income, debt and credit, and issues the commitment letter setting out the loan's terms and conditions.
Values the property for the lender. A low appraisal can reduce how much the lender will advance.
Reviews the commitment once issued, searches title and prepares to close on the date it sets.
Documents you will need
Tools for this stage
Six questions about certainty, timing and what an early exit would cost you. The result explains a mortgage type; it never points you to a lender or a rate.
Checklist builderWhat will the lender ask me for?Answer five questions about your income, down payment and status, and see the paperwork a lender is likely to ask for, sorted to what applies to you. Your specific lender may ask for more, or less.
CalculatorMortgage payment calculatorUse this to see a monthly, bi-weekly or accelerated payment for a given rate and amortization, with Canadian semi-annual compounding.
Guides to download
Questions people ask
Does a pre-approval lock in my rate or my financing?
Not fully. A pre-approval estimates what you can likely borrow from the information and credit check at that point; it is not tied to a specific property. The lender still reviews the real file, the appraisal and current income once you have an accepted offer.
Can I use a mortgage broker and still deal directly with a bank?
Yes. Comparing a broker's options against your own bank's offer is common, and taking one route does not stop you from also trying the other. Compare the full commitment letter, not just the advertised rate.
What happens if my income changes between approval and closing?
The lender can requalify you before advancing funds. A new job, reduced hours or a large purchase on credit can all affect the final approval, so keep your financial picture stable through closing.
Is the qualifying rate the same at every lender?
No. Federally regulated banks apply the rate set under OSFI's underwriting guideline. Provincially regulated credit unions and private lenders are not bound by that specific rule, though many still qualify borrowers conservatively.
What does my lawyer need before closing can be booked?
The signed commitment letter, the purchase agreement if you are buying, and the lender's instructions, which usually arrive a few weeks before the closing date.
Also in this centre
Read more
Related centres
Other Learning Centres for the same transaction.
What happens between deciding to buy and settling into an Ontario home: budget and pre-approval, the search, the offer and its conditions, financing and inspection, closing day and the first year, with the legal layer explained at every step.
Related centreThe Selling a Home CentreEverything between deciding to sell an Ontario home and the money reaching your account: preparing, pricing, offers, the buyer's conditions, closing and tax, plus the situations that change the rules: tenants, estates and separation.
Sources
- Mortgage Brokerages, Lenders and Administrators Act, 2006
- FCAC: mortgage pre-approval
- OSFI Guideline B-20: Residential Mortgage Underwriting Practices and Procedures
General information about Ontario law as of 5 September 2026, not legal advice. It does not create a lawyer–client relationship.
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