Mortgage FAQ

A mortgage pre-approval is a lender's conditional commitment to lend you a specific amount at a specific interest rate, based on a documented review of your income, credit, debts, and down payment. It's not the same as final approval — which requires a property appraisal and full underwriting — but it gives you a real rate hold (typically 90–120 days) so you can shop for a home knowing exactly what you qualify for.

FairChoice has been handling pre-approvals for Toronto buyers since 1997. We've seen every income structure, credit profile, and property type. A pre-approval conversation costs you nothing and takes about 30 minutes. Book a strategy call →

Pre-qualification is a rough estimate based on self-reported numbers — no documented income, no hard credit check, no rate hold. Pre-approval involves documented income verification, a hard credit check, and a written rate hold. Sellers and real estate agents take a pre-approval letter far more seriously. For Toronto's competitive market, always get a full pre-approval before you start house hunting.

No. A pre-approval is conditional — it's subject to the property appraising at the purchase price, your financial situation remaining unchanged, and full underwriting. For example, if the condo building has financial issues, or if you change jobs before closing, the lender may adjust terms. FairChoice helps you anticipate these scenarios before you make an offer.

Most rate holds are valid for 90 to 120 days. If you don't close within that period, the rate may need to be renegotiated. FairChoice monitors your hold expiry and can request an extension if needed.

A single hard credit check for a mortgage pre-approval typically has a small, temporary impact on your credit score (5–15 points). Multiple checks within a short period for the same purpose are usually treated as one inquiry by scoring models. FairChoice runs the check once and shops your file to multiple lenders without additional credit pulls.

Yes. Condo buyers need a pre-approval that accounts for condo fees and the building's financial health. Lenders review the condo corporation's status certificate, reserve fund, and owner-occupancy ratio. FairChoice helps you prepare so the condo appraisal doesn't derail your file.

Fixed rates lock in your payment for the full term (typically 1–5 years). They're predictable and protect you if rates rise. Variable rates start lower on average but change with the lender's prime rate — your payment can go up or down.

According to the 2025 CMHC Mortgage Consumer Survey, 62% of Canadians chose fixed-rate mortgages in 2025. A landmark study by York University Professor Moshe Milevsky found that historically, over 90% of Canadians who maintained a variable rate throughout their full term paid less in interest than those who chose fixed. The right choice depends on your cash flow flexibility and risk tolerance.

FairChoice explains both options, runs the numbers for your situation, and lets you decide — no pressure.

Canada's mortgage stress test requires all federally regulated lenders to qualify borrowers at a rate higher than the contract rate. As of August 2026, the minimum qualifying rate is the greater of the Bank of Canada's 5-year benchmark rate or the contract rate plus 2%.

Example: If your contract rate is 4.49%, you must qualify at approximately 6.49%. Most lenders want GDS below 39% and TDS below 44% for insured mortgages. FairChoice runs the stress test math for every client so you understand both what you'll actually pay and what the lender tests against.

Not necessarily. A lower rate might come with restrictive terms, high fees, or limited prepayment options. Consider the overall value: flexibility, prepayment privileges, portability, and the total cost over the term, not just the headline rate.

No. Many first-time buyers use insured mortgages with as little as 5% down on properties under $1 million. CMHC insurance is required but can be added to your mortgage balance. For homes $1M+, a 20% down payment is required.

Several programs can help Ontario first-time buyers:

• First Home Savings Account (FHSA): Contribute up to $8,000/year ($40,000 lifetime). Contributions are tax-deductible; withdrawals for a home purchase are tax-free.
• Home Buyers' Plan (HBP): Withdraw up to $60,000 from your RRSP tax-free per person. Repay over 15 years.
• Ontario Land Transfer Tax Refund: Up to $4,000 refund on the Ontario portion. Toronto first-time buyers can also claim up to $4,475 on the municipal portion. Total possible savings: up to $8,475.
• Home Buyers' Tax Credit (HBTC): Worth approximately $1,500 in tax savings.

Note: The First-Time Home Buyer Incentive (FTHBI) and Canada Greener Homes programs are no longer available as of 2026.

Plan for closing costs of approximately 1.5–3% of the purchase price, including land transfer tax, legal fees ($1,500–$2,500), home inspection ($400–$700), appraisal fee ($300–$500), title insurance ($250–$500), and moving costs. For an $800,000 Toronto condo, budget approximately $10,000–$15,000 beyond the down payment.

Yes. Self-employed borrowers typically need 2 years of tax returns (T1 Generals), Notice of Assessment, business financials (if incorporated), and GST/HST returns. FairChoice works with lenders who understand commission, contract, and incorporated income. We can find a pre-approval that reflects your actual income story, not just what the T1 shows.

Yes. Lenders typically want to see a 2-year history of commission or contract income. If you've been in the same industry for 2+ years, most lenders will average your income over that period. FairChoice has experience matching commission-based borrowers to lenders who understand variable income.

For CMHC-insured mortgages, the minimum is typically 600. For the best rates from major lenders, aim for 680+. If your score is lower, alternative and private lenders exist — expect higher rates and larger down payment requirements. FairChoice can review your situation and recommend the right path.

It's possible. For a recent bankruptcy, you typically need to wait until it's discharged and show re-established credit. Private lenders may be more flexible than banks. Some alternative lenders may consider a consumer proposal scenario sooner. FairChoice has helped clients in exactly these situations.

Most lenders require at least 20% equity in your home to refinance. If you have less, you may need mortgage default insurance, which adds to the cost. For a $700,000 home, that means you'd need at least $140,000 in equity.

Potential costs include a prepayment penalty if breaking your current term early (typically 3 months interest or the Interest Rate Differential, whichever is greater), legal fees of $800–$1,500, and an appraisal fee of $300–$500. FairChoice runs a break-even analysis for every refinance — how many months until your savings exceed the upfront costs. If the math doesn't work, we'll tell you.

A refinance application typically involves a credit check, which may cause a small, temporary dip (5–15 points). However, if refinancing helps you pay off high-interest debts, it could improve your credit over time.

Most brokers are paid a commission by the lender when the mortgage funds — so their service is typically free to you. Some brokers may charge a fee for complex files (e.g., private mortgages, bruised credit). Always ask about compensation before proceeding. FairChoice discloses all fees and commissions upfront. Our first strategy call is always free, with no obligation. Book a free call →

Brokers have access to multiple lenders — FairChoice works with 20+ including RMG, Scotiabank, MCAP, EQ Bank, First National, TD Bank, and more. We compare options across the market rather than just one bank's products. Having access to the full market typically gives you more competitive options.

FairChoice partners with 20+ lenders — major banks, credit unions, monoline lenders, and private lenders. This breadth means we can match your file to the right lender, whether you have straightforward income, self-employment, bruised credit, or a unique property type.

Yes. Toronto is unique in Ontario — it has both a provincial land transfer tax and a municipal land transfer tax. First-time buyers can claim rebates on both: up to $4,000 on the Ontario portion and up to $4,475 on the Toronto portion, for total savings of up to $8,475.

Yes. Some lenders offer programs specifically for newcomers with as little as 5% down and alternative credit assessment using rental history, utility payments, or international credit history. FairChoice has experience with newcomer files and knows which lenders offer the best terms.

Pre-approval: 1–3 business days. Full approval after an accepted offer: 5–10 business days. Closing: typically 30–90 days from offer acceptance. FairChoice coordinates with your lender, lawyer, and real estate agent to keep everything on track.