Mortgage Journey · Stage 2, branch

What a Pre-Approval Actually Holds for You

A pre-approval holds a rate. It does not hold an approval. Those are two different promises, and the gap between them is where most unpleasant surprises live. This branch sets out exactly what is locked, for how long, and what changes when the real commitment arrives.


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Pekoe Mortgages is licensed in Ontario (FSRA #13321) and Alberta (RECA). This branch page routes you to the answer. It does not replace it.

Where you are

What this branch decides

What you can rely on, and for how long. A standard rate hold usually runs 180 days. That protects you from rate increases for the length of the hold. It does not promise that a lender will fund your purchase, because no property has been assessed and no income has been verified yet.

Treat a pre-approval as a budget and a rate ceiling. Treat the commitment, which arrives in stage 4, as the actual decision.

Everything below exists because people make firm offers on the strength of a pre-approval. A pre-approval is not a financing condition, and the two are not interchangeable protection.

Your steps

What is held, and what is not

The honest division between a pre-approval and a commitment.
ThingHeld at pre-approvalSettled at commitment
The interest rateYes, usually for 180 daysConfirmed, or repriced if the hold has expired
The amount you qualify forEstimated from what you statedConfirmed against verified income and debts
Your incomeStated, not provedProved with documents
The propertyNot assessed, because there is noneAppraised, and reviewed against lender policy
The down paymentDeclaredTraced to source
Whether the deal fundsNoYes, subject to the conditions listed on the commitment

The citable fact: a mortgage pre-approval holds a rate, commonly for 180 days, but it does not commit a lender to fund any particular purchase.

Who is involved

Who you deal with at this point

You

Giving accurate numbers. A pre-approval built on optimistic income is a pre-approval that fails at stage 4.

Your mortgage broker

Choosing which lender holds the rate, tracking the expiry date, and telling you what the hold does not cover.

The lender

Holding the rate, and reserving every real decision until it has documents and a property.

Not the seller, and not your agent

Neither of them can tell you what your pre-approval covers, though both may ask to see it.

Documents needed

What ends a rate hold early

A hold can end before its expiry date. These are the usual reasons.
What changesEffect on the holdWhat to do
The hold simply expiresGone. You are repriced at whatever is available thenDiarise the expiry date the day you get the pre-approval
Your income or employment changesThe file is reassessed and the hold may not survive itTell your broker before you accept a new job, not after
You take on new debtQualifying amount drops, and the hold may be withdrawnBuy the car after closing, not before
Your credit score fallsThe rate tier can change even if the hold standsNothing new on credit until the deal funds
You switch lendersThe old hold does not travel with youExpect a new rate at the new lender
The purchase is pre-constructionA standard hold cannot span a multi-year buildExpect to qualify again near final closing

Some lenders offer longer holds through builder mortgage programmes, decided case by case rather than offered as a standard product. Do not assume one is available to you.

Tools for this branch

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Read next

The answers behind each step

How long it lasts. How long a pre-approval lasts, and how a rate hold works at renewal, which is a different mechanism from a purchase hold.

What it does to your credit. Whether a pre-approval affects your score and what score lenders want.

When it does not hold. Declined after a pre-approval and declined by a lender.

The dangerous confusion. A pre-approval is not a financing condition, which is one of the most expensive misunderstandings at this stage.

What the commitment involves. Whether a commitment fee is refundable, the document set, and how long the whole thing takes.

If your work situation is unusual. A new job or probation, first year self-employed, and changing jobs before closing.

If you are buying pre-construction. Financing a pre-construction condo, where no standard hold spans the build.

The qualifying rule behind the number. The mortgage stress test.

Frequently Asked Questions

How long is a mortgage rate hold?

A standard hold usually runs 180 days. Some lenders go longer through builder mortgage programmes, but that is decided case by case rather than offered as a standard product.

Does a pre-approval mean I am approved?

No. It holds a rate and gives you a working budget. The lender has not verified your income or looked at a property, so it has not agreed to fund anything yet.

Can I make a firm offer on a pre-approval?

You can, and it is the most expensive risk at this stage. A pre-approval is not a financing condition, and without that condition the property risk sits with you and your deposit.

What happens when the rate hold expires?

You are repriced at whatever is available then, higher or lower. Diarise the expiry date on the day you receive the pre-approval rather than discovering it later.

If rates fall during my hold, do I get the lower rate?

Usually yes, lenders will honour a drop, but it is a lender policy rather than a rule. Ask your broker how your specific lender handles it before you rely on it.

Does the hold follow me if I change lenders?

No. The hold belongs to the lender that issued it. Moving to a different lender means a new rate at that lender.

Will a rate hold cover a pre-construction purchase?

Not a multi-year build. A standard hold cannot span that long, so expect to qualify again close to final closing, under whatever rules apply then.

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Pekoe Mortgages is a licensed brokerage in Ontario (FSRA #13321) and Alberta (RECA). This page is general information, not financial advice, and does not create a broker and client relationship.