How long does mortgage approval take?

In Canada, there is no fixed timeline for mortgage approval. Approval time depends on how complete your documents are, how straightforward your income and property are, and how busy the lender is. What you can control is preparation, because most delays come from missing documents, unexplained deposits or an appraisal that raises questions.

The stages of a mortgage approval

A purchase mortgage usually moves through four steps.

1. Application. You complete an application, and your credit report is pulled. We review your income, debts and down payment against the lender rules that fit.
2. Documents. You provide proof of income, down payment and identity. The lender's underwriter (the person who reviews and decides on applications) checks each one.
3. Conditional commitment. The lender issues a commitment that lists its conditions, such as an appraisal, an updated pay stub or a gift letter. The mortgage is subject to lender approval until every condition is met.
4. Funding. Once conditions are satisfied, the lender sends instructions to your real-estate lawyer and advances the funds on closing day.

What slows a mortgage approval down

Some causes come up again and again:

• Missing or outdated documents. A pay stub that is too old or a statement that does not show your name means another round.
• Unexplained deposits. Lenders want to know where your down payment came from. The lender will query a large transfer with no explanation.
• Variable or self-employed income. Income that needs two years of history takes longer to review than a salary.
• The appraisal. If the lender's valuation comes in below the price, the amount it will lend may change, and you may need more down payment.
• Condo and unusual properties. The lender may need to review the status certificate or have questions about the building or property type.
• Changes during the process. A new loan, a job change or a late payment between application and closing can reopen the review.

How to keep your approval moving

Many buyers get a pre-approval before they shop, so their income and credit are reviewed early. A pre-approval is subject to lender approval and is not a commitment to lend. Keeping your finances steady until closing also helps.

If you make an offer conditional on financing, the condition gives you a set number of days to get firm approval. Have your documents ready before you sign.

We go to banks, credit unions and monoline lenders first. If your situation needs an alternative lender, the documents and steps are similar, though the lender may ask for different proof of income.

What to do next

To start with a pre-approval and see what your application will need, use our call-me-back form. You can also read our first-time buyer checklist.