London & Southwestern Ontario
Mortgage Pre-Approval in London, Ontario
A pre-approval tells you what a lender is prepared to consider before you write an offer on a London home — and just as importantly, it tells your realtor you're a serious buyer.
Here's what actually goes into one, what it does not guarantee, and the mistakes that cost buyers deals.
Nandan Bajani · Licensed Mortgage Agent | Ontario · The Mortgage Firm Inc.
What a pre-approval is (and isn't)
A pre-approval is a lender's review of your income, credit and down payment against its guidelines, usually with a rate hold attached. It is not a final approval. Final approval always depends on the specific property, the appraisal, and your circumstances staying the same between pre-approval and closing.
Documents to have ready
Having these in one folder shortens the process considerably.
- Photo ID and confirmation of Canadian residency status
- Recent pay stubs and a job letter, or two years of T1 Generals and Notices of Assessment if self-employed
- Two years of T4s or NOAs where bonus, commission or overtime income is being used
- 90-day history of the down payment funds, plus a gift letter if any portion is gifted
- Details of existing debts: car loans, lines of credit, credit cards, student loans
How the stress test affects your number
Federally regulated lenders qualify you at the greater of 5.25% or your contract rate plus 2%. That qualifying rate — not your actual payment — drives the maximum mortgage most lenders will offer. It's the single biggest reason a pre-approval amount comes in lower than buyers expect.
Down payment and price in the London market
Minimum down payment is 5% on the first $500,000 of purchase price, 10% on the portion between $500,000 and $999,999, and 20% at $1,000,000 or more. Budget separately for closing costs — legal fees, title insurance, adjustments and Ontario land transfer tax, which applies on London purchases (there is no additional municipal land transfer tax here as there is in Toronto).
Pre-approval vs pre-qualification
A pre-qualification is a quick estimate based on numbers you state. A pre-approval involves documents, a credit check and a lender review. Some listing agents in competitive London segments will ask which one you're holding.
Common mistakes after you're pre-approved
- Financing a vehicle or furniture before closing — it changes your debt ratios
- Changing jobs, or moving from salaried to contract, mid-file
- Moving down payment funds between accounts without keeping statements
- Assuming the rate hold applies to a purchase that closes after it expires
Related reading
Questions people ask
How long does a pre-approval last?+
Rate holds are commonly 90 to 120 days depending on the lender and product. If you're still shopping when it expires, it can usually be re-run with updated documents.
Does a pre-approval hurt my credit score?+
A pre-approval involves a credit check, which is a hard inquiry. One inquiry has a modest effect; repeatedly applying at multiple institutions over a long period has more.
Can I be pre-approved and still be declined?+
Yes. Final approval depends on the property, appraisal value and your circumstances remaining unchanged. That's why financing conditions matter.
Should I get pre-approved before talking to a realtor?+
It's usually the better order. Knowing your realistic range first saves time and avoids falling for homes outside it.
Do I need 20% down to buy in London?+
No. Insured mortgages allow 5% down on the first $500,000, subject to qualifying and mortgage default insurance premiums.
Get a realistic pre-approval number for London
A short conversation is usually enough to know what's realistic. No obligation, no pressure.