Five Questions That Tell You Whether a Lender Will Say Yes Before You Apply
A lender sees your application roughly 72 hours before you do. Before that, the file moves through automated systems that flag red items without human review. If you fail one of five checks, the application stalls before anyone reads your letter of explanation. Here's how to run the same filters yourself.
Can you prove 24 months of income in the same field?
Lenders don't care about your work history. They care about predictable future income. A borrower who earned $75,000 as a teacher and then switched to commissioned sales six months ago shows zero qualifying income from the new job, even if current paycheques are strong. The rule: two years in the same industry, same income type. T4 employees with one employer for 24 months pass automatically. Self-employed applicants need two years of filed tax returns showing Line 15000 net income. Commissioned workers need 24 months of T4s with commission breakdowns. If you switched industries in the last 18 months, you're applying on the old job's income only, which often means you can't afford what you thought you could.
Do your debts stay under 44 percent of gross income?
The Total Debt Service ratio caps all monthly debt payments at 44 percent of gross monthly income. Lenders add up your proposed mortgage payment (principal, interest, property tax, half the condo fees if applicable), then add every car payment, student loan minimum, and credit card minimum you carry. A $5,000 credit card with a 3 percent minimum costs you $150 a month in this calculation even if you pay it off in full every month. A borrower earning $6,000 gross has $2,640 available for all debts. If existing debts eat $800, the mortgage payment can't exceed $1,840. Pay off the car or the card before you apply, and that $1,840 climbs immediately. Most applications fail because the buyer didn't subtract existing debts before running affordability calculators online.
Can you pass the stress test at contract rate plus 200 basis points?
As of August 2026, OSFI requires you to qualify at the higher of 5.25 percent or your contract rate plus 2 percent. If you're offered 3.5 percent, you qualify at 5.5 percent. On a $500,000 mortgage, the payment at 3.5 percent is $2,224. At 5.5 percent it's $2,839. The bank uses the higher number to calculate your TDS ratio, even though you'll pay the lower amount. If you can't carry the $2,839 payment on paper, the approval doesn't happen. Run your numbers at the stress-test rate, not the rate you see advertised. If the math doesn't work there, you're not ready.
Can you document three months of clean bank statements for the down payment?
Anti-Money Laundering rules require lenders to verify the source of every dollar in your down payment. The money must sit in your account for 90 days before the lender will accept it as "seasoned." A $40,000 deposit that appears 30 days before application triggers a source-of-funds request. If it's a gift, you need a signed letter from the donor stating it's non-repayable. If you can't document it, the lender subtracts it from your available down payment. The worst version: a family member lends you $50,000, you deposit it, and the lender discovers it's a loan. That $50,000 gets added to your TDS ratio as a monthly debt, and the application fails. Verify now that your down payment has been in your account since May 2026 or earlier, or prepare the gift letter and supporting documents before you start.
Is your credit score above 680 with at least two years of active trade lines?
A credit score of 680 qualifies you for A-lender rates. Below that, you're looking at B-lenders with rates 1 to 2 percent higher and fees of 1 to 2 percent of the loan. But the score alone isn't enough. Lenders want to see a credit file with at least two years of history and at least two active accounts. A 720 score built on one credit card opened 14 months ago reads as a thin file. The fix takes time: open a second card or a small line of credit, use it for recurring bills, and wait. You can't shortcut credit history, which is why this question matters six months before you plan to apply, not six days before.
If you pass all five, you're mortgage-ready. If you fail one, fix it before the lender sees the application.
A lender sees your application roughly 72 hours before you do. Before that, the file moves through automated systems that flag red items without human review. If you fail one of five checks, the application stalls before anyone reads your letter of explanation. Here's how to run the same filters yourself.
Can you prove 24 months of income in the same field?
Lenders don't care about your work history. They care about predictable future income. A borrower who earned $75,000 as a teacher and then switched to commissioned sales six months ago shows zero qualifying income from the new job, even if current paycheques are strong. The rule: two years in the same industry, same income type. T4 employees with one employer for 24 months pass automatically. Self-employed applicants need two years of filed tax returns showing Line 15000 net income. Commissioned workers need 24 months of T4s with commission breakdowns. If you switched industries in the last 18 months, you're applying on the old job's income only, which often means you can't afford what you thought you could.
Do your debts stay under 44 percent of gross income?
The Total Debt Service ratio caps all monthly debt payments at 44 percent of gross monthly income. Lenders add up your proposed mortgage payment (principal, interest, property tax, half the condo fees if applicable), then add every car payment, student loan minimum, and credit card minimum you carry. A $5,000 credit card with a 3 percent minimum costs you $150 a month in this calculation even if you pay it off in full every month. A borrower earning $6,000 gross has $2,640 available for all debts. If existing debts eat $800, the mortgage payment can't exceed $1,840. Pay off the car or the card before you apply, and that $1,840 climbs immediately. Most applications fail because the buyer didn't subtract existing debts before running affordability calculators online.
Can you pass the stress test at contract rate plus 200 basis points?
As of August 2026, OSFI requires you to qualify at the higher of 5.25 percent or your contract rate plus 2 percent. If you're offered 3.5 percent, you qualify at 5.5 percent. On a $500,000 mortgage, the payment at 3.5 percent is $2,224. At 5.5 percent it's $2,839. The bank uses the higher number to calculate your TDS ratio, even though you'll pay the lower amount. If you can't carry the $2,839 payment on paper, the approval doesn't happen. Run your numbers at the stress-test rate, not the rate you see advertised. If the math doesn't work there, you're not ready.
Can you document three months of clean bank statements for the down payment?
Anti-Money Laundering rules require lenders to verify the source of every dollar in your down payment. The money must sit in your account for 90 days before the lender will accept it as "seasoned." A $40,000 deposit that appears 30 days before application triggers a source-of-funds request. If it's a gift, you need a signed letter from the donor stating it's non-repayable. If you can't document it, the lender subtracts it from your available down payment. The worst version: a family member lends you $50,000, you deposit it, and the lender discovers it's a loan. That $50,000 gets added to your TDS ratio as a monthly debt, and the application fails. Verify now that your down payment has been in your account since May 2026 or earlier, or prepare the gift letter and supporting documents before you start.
Is your credit score above 680 with at least two years of active trade lines?
A credit score of 680 qualifies you for A-lender rates. Below that, you're looking at B-lenders with rates 1 to 2 percent higher and fees of 1 to 2 percent of the loan. But the score alone isn't enough. Lenders want to see a credit file with at least two years of history and at least two active accounts. A 720 score built on one credit card opened 14 months ago reads as a thin file. The fix takes time: open a second card or a small line of credit, use it for recurring bills, and wait. You can't shortcut credit history, which is why this question matters six months before you plan to apply, not six days before.
If you pass all five, you're mortgage-ready. If you fail one, fix it before the lender sees the application.
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