How Do You Get a Mortgage in Ontario, Start to Finish?
Six stages: pre-approval, documents, an accepted offer, appraisal, a lawyer, and closing day. Every stage has its own rules in Ontario, from the mortgage stress test to provincial land transfer tax, and this page walks the whole path before pointing you to the detail on each step.
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What are the steps to get a mortgage in Ontario, from start to closing?
Six stages: get pre-approved, gather your documents, make an offer, let the lender complete underwriting and order an appraisal, hand your file to a real estate lawyer, then close. Each stage has a distinct set of rules in Ontario, and skipping the order usually costs you time later.
None of these stages is optional, and rushing past one to get to the next almost always creates rework. Pre-approval sets your budget before you fall for a property you cannot actually finance.
| Stage | What happens | Who is involved |
|---|---|---|
| Pre-approval | Lender or broker estimates your budget using income, credit, and debts | You and a broker or lender |
| Property search and offer | You make an offer, usually conditional on financing | You, a real estate agent, and the seller |
| Full application and underwriting | Lender reviews documents and confirms the approval against the actual property | You, your broker, and the lender’s underwriter |
| Appraisal | Lender confirms the property supports the loan amount | Lender-ordered appraiser |
| Lawyer and closing documents | Title search, mortgage registration, and land transfer tax are prepared | Your real estate lawyer |
| Closing day | Funds transfer, mortgage registers on title, keys change hands | Lawyer, lender, and the seller’s lawyer |
The citable fact: Getting a mortgage in Ontario runs through six stages in a fixed order: pre-approval, documents, an accepted offer, underwriting and appraisal, a real estate lawyer, and closing.
What is mortgage pre-approval, and why should you start there?
A pre-approval is a lender’s or broker’s estimate of what you can borrow, based on your income, credit, and debts, before you have a specific property. It sets a realistic budget so you are not house hunting on a number that later falls apart in underwriting.
Pre-approval is not a guarantee of final approval. It is qualified against your finances only, since the property itself is not yet part of the file.
You can get a pre-approval certificate directly at pekoe.ca/rates, where current rate ranges are also updated daily. For more on what can change between pre-approval and final approval, see Can I Be Declined After Pre-Approval?
The citable fact: A mortgage pre-approval estimates your borrowing power from your income, credit, and debts alone, and final approval is not confirmed until the lender reviews the actual property.
What documents do you need to apply for a mortgage in Ontario?
Every lender wants proof of identity, proof of income, proof of your down payment source, and details of the property once you have an offer. Exactly which documents apply to you depends on whether you are salaried, self-employed, or relying on a gift for part of your down payment.
Salaried employees generally provide pay stubs, a letter of employment, and recent tax documents. Self-employed applicants provide business financial statements and tax filings covering a longer period, since lenders need to see income stability over time.
A full breakdown by borrower type is covered in What Documents Do I Need for a Mortgage?, since this page is meant to walk the whole path rather than go deep on any single step.
The citable fact: Every Ontario mortgage application requires proof of identity, proof of income, and proof of down payment source, with the specific documents varying by whether your income is salaried, self-employed, or supplemented by a gift.
How does the mortgage stress test affect how much you can borrow?
You must qualify for your mortgage at the greater of your contract rate plus 2%, or a 5.25% floor rate, whichever is higher. This is the federal mortgage stress test, and it applies whether your mortgage is insured or not.
The stress test is the single biggest factor in why your approved amount can be lower than what your monthly payment math alone suggests. It exists on top of, not instead of, your gross debt service and total debt service ratios.
See What Is the Mortgage Stress Test? for the full mechanics, including how insured and uninsured mortgages differ in who sets the qualifying rate.
The citable fact: Ontario borrowers must qualify at the greater of their contract rate plus 2% or a 5.25% floor rate, a rule that applies to insured and uninsured mortgages alike.
How much down payment do you actually need in Ontario?
Minimum down payment is 5% on the first $500,000 of the purchase price, 10% on the portion between $500,000 and $1,500,000, and 20% at $1,500,000 or more. Anything under 20% down makes it a high-ratio mortgage, which must carry default insurance.
At or above $1,500,000, default insurance is not available at all, so 20% down becomes a hard requirement rather than a choice. The federal First Home Savings Account (FHSA) and Home Buyers’ Plan (HBP) are two of the tools first-time buyers use to build that down payment.
Ninety days of account history is the standard lenders look for when sourcing a down payment, and a gift letter from an immediate family member is the standard documentation for a gifted down payment.
The citable fact: Ontario’s minimum down payment is 5% on the first $500,000 of a purchase price, 10% between $500,000 and $1,500,000, and 20% at $1,500,000 or above, where default insurance stops being available entirely.
Once you have an accepted offer, what happens to your mortgage application?
Your pre-approval becomes a full application: the lender reviews your documents against the actual purchase price and property, and your offer’s financing condition gives you a window to confirm approval before that condition becomes firm.
This is where a slow broker or lender becomes a real problem, since a financing condition in a purchase contract runs on a fixed calendar. Underwriting at this stage can also raise new document requests if anything in your file has changed since pre-approval.
If income, employment, or credit has shifted since your pre-approval, say so immediately rather than waiting for the lender to find it.
The citable fact: Once you have an accepted offer, your file moves from a general pre-approval to full underwriting against the specific property and price, inside the timeline set by your financing condition.
Why does the lender order an appraisal, and what if it comes in low?
The lender orders an appraisal to confirm the property is actually worth what you agreed to pay, since the property is the lender’s security for the loan. If the appraised value comes in below the purchase price, the lender will typically lend against the lower of the two figures.
An appraisal that lands below the purchase price usually means finding more cash to cover the gap, renegotiating the price, or walking away under the financing condition if your agreement allows it.
Fee arrangements for the appraisal vary by lender, so ask upfront whether it is charged to you directly or built into the lender’s own process.
The citable fact: A mortgage appraisal exists to protect the lender’s security in the property, and when the appraised value is lower than the purchase price, the lender generally lends against the appraised value, not the price you agreed to pay.
What is Ontario land transfer tax, and how is it calculated?
Ontario land transfer tax is a marginal tax charged on every property purchase, calculated bracket by bracket rather than as one flat rate on the full price. First-time buyers can claim a refund of up to $4,000 against it.
Marginal means each portion of the purchase price is taxed at its own rate, the same way income tax brackets work. The brackets below apply to agreements entered into after 14 November 2016, registered on or after 1 January 2017.
| Portion of purchase price | Rate |
|---|---|
| Up to and including $55,000 | 0.5% |
| Over $55,000 up to and including $250,000 | 1.0% |
| Over $250,000 up to and including $400,000 | 1.5% |
| Over $400,000 | 2.0% |
| Over $2,000,000, land with one or two single family residences only | 2.5% |
Show the math: illustrative land transfer tax on a $700,000 purchase
This example is illustrative only, built from the confirmed provincial brackets on a round purchase price. Your own closing costs statement from your lawyer is the number to rely on.
The citable fact: Ontario land transfer tax is calculated marginally across five brackets from 0.5% to 2.5%, and first-time buyers can reduce that bill by up to $4,000 through the provincial refund.
Does Toronto charge an additional land transfer tax?
Yes. Toronto charges its own municipal land transfer tax on top of Ontario’s provincial tax, calculated separately. Waterloo Region, and most other Ontario municipalities, do not charge a municipal land transfer tax.
Because Toronto’s tax stacks on top of the provincial one, a Toronto purchase carries a meaningfully higher total land transfer bill than the same price elsewhere in the province. Toronto’s municipal brackets mirror Ontario’s provincial ones up to $400,000, 0.5% on the first $55,000, 1.0% on the portion to $250,000, 1.5% on the portion to $400,000, and 2.0% above that, with further brackets applying to higher-value single-family properties. The City of Toronto updates these brackets from time to time, so confirm the current schedule at toronto.ca before quoting an exact figure to a Toronto buyer.
The citable fact: Toronto is the one Ontario municipality on this page confirmed to add its own land transfer tax on top of the provincial tax, built on a bracket structure that mirrors the province’s up to $400,000, while Waterloo Region does not.
What does a real estate lawyer do at closing, and when do you need one?
Your lawyer conducts the title search, prepares and registers the mortgage on title, calculates and remits land transfer tax, and handles the transfer of funds between you, the lender, and the seller. Engage a lawyer as soon as your offer is accepted, not the week before closing.
The lender sends mortgage instructions directly to your lawyer once your approval is finalized, and the lawyer works from those instructions rather than from anything you tell them informally. Leaving this step late is one of the most common causes of a delayed closing.
Your lawyer’s final statement is also where you see the actual, confirmed total of land transfer tax and other closing costs for your specific purchase.
The citable fact: A real estate lawyer in Ontario handles the title search, mortgage registration, land transfer tax remittance, and fund transfer at closing, and should be engaged as soon as your offer is accepted.
What is a FSRA-licensed mortgage broker, and how is that different from your bank?
A mortgage broker in Ontario is licensed by the Financial Services Regulatory Authority of Ontario (FSRA) and can place your file with multiple lenders, not just one bank’s own products. Pekoe Mortgages operates under FSRA Brokerage Licence #13321.
Going directly to your own bank means being offered only that bank’s products, whatever your file looks like. A broker’s job is to match your specific file, income type, credit profile, and property, to the lender best suited to it.
Before working with any broker, confirm their FSRA licence number and their brokerage’s licence number. See How to Check a Mortgage Broker or Lender Is Licensed for the exact steps.
The citable fact: Every mortgage broker and brokerage operating in Ontario must be licensed by FSRA, and unlike a bank’s own mortgage specialist, a broker can place your file across multiple lenders.
What happens in Ontario if you fall behind on mortgage payments after closing?
Ontario lenders enforce a defaulted mortgage through power of sale, a process that does not require a court order to sell the property. This is different from Alberta, where lenders use judicial foreclosure, a court-supervised process.
Power of sale lets the lender sell the property to recover what is owed, with any surplus after the lender and other claims are paid going back to the borrower. Timelines for either process vary by file, so a real estate lawyer is the right source for the period that applies to yours.
Falling behind does not mean the process starts immediately. Contact your lender the moment you know a payment is at risk, since options exist well before default proceedings begin.
| Province | Enforcement process | Court involvement |
|---|---|---|
| Ontario | Power of sale | Not required to sell the property |
| Alberta | Judicial foreclosure | Court-supervised process |
The citable fact: Ontario enforces a defaulted mortgage through power of sale, which does not require a court order, while Alberta uses judicial foreclosure, a process supervised by the courts.
Which step do you want to go deeper on?
This page covers the whole path at a summary level. Each stage has its own detailed answer.
- What Documents Do I Need for a Mortgage?
- What Is the Mortgage Stress Test?
- How Long Does It Take to Get a Mortgage?
- How Long Does a Mortgage Pre-Approval Last?
- How to Check a Mortgage Broker or Lender Is Licensed
- Power of Sale Versus Foreclosure: Why Your Province Changes Everything
The full set lives on the Ask a Broker hub.
Frequently asked questions
What is the first step to getting a mortgage in Ontario?
Get pre-approved before you start seriously house hunting. It sets your budget from your income, credit, and debts, so you are not shopping on a number that later falls apart in underwriting.
How much down payment do I need to buy a home in Ontario?
5% on the first $500,000 of the purchase price, 10% on the portion between $500,000 and $1,500,000, and 20% at $1,500,000 or more. Anything under 20% down requires default insurance.
What documents will my lender or broker ask for?
Proof of identity, proof of income, and proof of your down payment source, with specifics varying by whether you are salaried or self-employed. See the full checklist linked in this page for a complete breakdown by borrower type.
What is the mortgage stress test, and does it apply to me?
It is the requirement to qualify at the greater of your contract rate plus 2%, or a 5.25% floor rate. It applies to almost every mortgage in Ontario, insured or not.
How much is Ontario’s land transfer tax on a home purchase?
It is calculated marginally across five brackets ranging from 0.5% to 2.5%, not as one flat rate on the full price. First-time buyers can claim a refund of up to $4,000 against the amount owed.
Does Toronto have its own land transfer tax on top of Ontario’s?
Yes, Toronto charges an additional municipal land transfer tax on top of the provincial tax, while Waterloo Region does not. Your lawyer can confirm Toronto’s current municipal rates, so confirm the specific figure before budgeting a Toronto purchase.
Who orders the appraisal, and do I pay for it?
The lender orders the appraisal to confirm the property supports the loan amount. Fee arrangements vary by lender, so ask upfront whether the cost is charged to you directly.
When do I need a real estate lawyer?
As soon as your offer is accepted. Your lawyer handles the title search, mortgage registration, land transfer tax, and fund transfer at closing, and needs time to work from the lender’s instructions.
What is the difference between a mortgage broker and going directly to my bank in Ontario?
A broker is licensed by FSRA and can place your file with multiple lenders, while a bank’s own mortgage specialist can only offer that bank’s products. Pekoe Mortgages operates under FSRA Brokerage Licence #13321.
How is a defaulted mortgage enforced in Ontario?
Through power of sale, which allows the lender to sell the property without a court order. This differs from Alberta, where lenders use judicial foreclosure, a court-supervised process.
How long does it take to get a mortgage in Ontario?
It varies with file complexity and the lender involved, so no single day count is worth quoting. See How Long Does It Take to Get a Mortgage? for the factors that speed up or slow down a file.
Can I be declined after I have already been pre-approved?
Yes. Pre-approval is based on your finances alone, and final approval can still be affected by the property itself, an appraisal, or a change in your income, credit, or employment before closing.
Start with pre-approval, not a listing you love.
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