Buying a home is a big deal. One of the first questions you’ll ask is: How much mortgage can you get approved for?
A few simple numbers matter: your income, credit score, monthly debts and down payment. Lenders also check your debt-to-income ratio to see what you can afford.
Whether it’s your first home, an upgrade or planning for later, knowing your borrowing limit helps you shop smart. It keeps stress low and confidence high.
At AJP Mortgage, we guide you every step of the way. We’ll review your finances, explain your options and help you secure the best mortgage without any hassle.
Why Mortgage Approval Amount Matters?
Knowing your mortgage approval amount keeps your home search realistic, focused, and stress-free. It’s the first step to buying with confidence and avoiding surprises down the road.
Sets a realistic budget
It’s easy to fall in love with a home before knowing your numbers. Pre-approval prevents disappointment later by showing you what you can afford.
Strengthens your offer
In a competitive market, pre-approval shows sellers you’re a serious buyer. Offers backed by lender pre-approval are more likely to get accepted.
Spotlights improvement areas
Your pre-approval shows your income, debts, and credit. If something is not quite right, like a high debt ratio or low credit score, you’ll know early and have time to improve it.
Protects against rate hikes
Pre-approvals often include a rate hold (90–120 days). That means if rates rise during your home search, you’re still locked in.
Power for negotiation
If you know your max budget and have lender flexibility, you can confidently negotiate and close deals faster.
What Is Mortgage Pre-Approval?
A mortgage pre-approval is a conditional offer from a lender stating how much they’ll loan you. It’s based on your current income, credit, debts, and down payment.
What you’ll get?
What it’s not?
A guaranteed loan (final approval depends on property, final paperwork, and your financial situation when you go to close)
How much mortgage can you get approved for?
It mainly depends on a few key things:
Your income: More income usually means you can qualify for more
Credit score: A good score can get you better approval and lower rates
Monthly debts: Lenders check what you already owe
Down payment: A bigger down payment can help increase your approval amount
Lender rules: Each lender has their own guidelines
Most lenders look at your debt-to-income ratio to see what you can afford. As a rough idea, your housing costs should be around 30 to 32% of your income, and all debts combined under 40 to 44%.
This is just a quick overview. There’s a lot more that goes into it, and we’ll break it all down for you.
Why Getting Pre-Approved Early Is Smart?
Want to shop with confidence? Getting pre-approved early shows you what you can afford and helps you move faster when you find the right home.
At AJP Mortgage, we guide you through every step, from gathering documents to comparing lenders, locking in rates, and submitting your application.
Key Factors That Affect Mortgage Approval
Wondering how much you can get approved for? It all comes down to a few key factors like income, credit score, debts, and your down payment.
Income & Job Stability
Lenders need to see your income and how reliable it is.
Employed people: Show two years at same job or field. If you’re new (under 2 years), be ready to explain a career move or a more stable role.
Bonuses or commission: Lenders average them over 2–3 years if they are consistent.
Self-employed: Typically, you’ll need two years of tax returns, Notices of Assessment, and business financials. If you’re newer, some lenders might accept bank statements or one year of income, but they’ll look at your file more closely.
Rental/investment income: Must be documented through lease agreements and proof of ongoing tenancy.
Why it matters?
Stable income lowers lender risk and may qualify you for better rates and terms.
Credit Score & History
Your credit score does a lot of work for you, and it shows how well you manage debt.
Credit Score Range
What lenders review
Tips to boost your score
Even small improvements in credit score can reduce your interest rate and bolster approval odds.
Debt Obligations & Ratios
Lenders want to know how much you owe before they approve your mortgage. That’s where debt ratios come in. They help show if you can handle new payments comfortably.
Two core ratios
GDS (Gross Debt Service): Housing costs divided by gross income
TDS (Total Debt Service): Housing + all debts divided by gross income
Typical targets
What’s included
Mortgage payment (P+I)
Property taxes & heating
Condo fees
Minimum monthly payments on other debts (e.g. credit cards, loans)
Boosting your capacity
Reducing $200/month in debt could increase your mortgage capacity significantly.
Down Payment & Savings
Your down payment and savings play a big role in how much mortgage you can get. The more you have set aside, the better your chances of getting approved.
Minimum required
Why more is better?
Acceptable sources
Always leave a buffer after closing for moving costs, repairs, and emergencies.
The Mortgage Stress Test
Canada requires you pass a stress test so you can handle rate rises.
You must qualify at
Your mortgage rate + 2%, or
Bank of Canada benchmark rate (whichever is higher)
It lowers how much you can borrow, but it also helps protect you.
How it works?
Rates go up in your application, recalculating your max mortgage payment, aligning it with affordability.
Interest Rates & Mortgage Term
Interest rates and your mortgage term can change how much you qualify for and what your payments look like. Even small changes can make a big difference
Effect on affordability
Lower rates = lower payments = more borrowing capacity.
Higher rates = smaller mortgage amounts.
Which term to choose?
Fixed: Predictable. Rate stays the same. Stress test uses contract rate + 2%.
Variable: May be lower initially but can rise. Stress test may use benchmark rate.
Picking longer terms locks in stability and can boost qualifying ability if rates are likely to increase later.
Amortization Length
The amortization is the actual timeline to pay off the mortgage.
25 years is typical
30 years is optional on big down payments or for conventional mortgages
A longer term means lower monthly payments, but you’ll end up paying more in total interest.
It might help you qualify for a bigger mortgage now, but keep in mind you’ll end up paying more in the long run.
Property Type & Location
Standard homes = easier approval
Condos, rural properties, or properties needing repair may need extra documentation or higher down payments
Lenders evaluate resale potential, condo building finances, and local market trends
Let us match your home plans to lenders who understand your property.
Mortgage Insurance (CMHC, Genworth, CG)
If you put down less than 20%, insurance is mandatory.
Effects
With a smaller down payment, insurance makes homeownership possible for many first-time buyers.
Special Situations
Self-employed: Requires tax returns, business statements, or bank-statement-based qualification
New to Canada: May need a co-signer or specialized lender programs
Co-borrowing: Adds income but also more debt, so joint financial profiles matter.
Investment properties: Higher down payments (20–35%) and stricter ratio requirements
Refinancing / Second mortgage: Equity and debt levels matter
Everyone’s situation is unique. We help you navigate the right approach.
Documents You’ll Need
Lenders need to see proof of your income, debts, and savings. Having the right documents ready can speed up your approval and make the process smoother.
Being organized helps you get approved more easily and keeps stress low.
Step-by-Step Walkthrough
Ready to find out your mortgage limit? Follow this simple step by step walkthrough to see exactly how lenders crunch the numbers.
Step 1: Gather Info
Start by listing out your monthly income, any debts like loans or credit cards, how much you’ve saved, and your credit details. Having this info ready makes everything else easier.
Step 2: Check Credit
Get your free credit report and score online. Look for any mistakes and fix them. A better score can help you qualify for more and get a lower rate.
Step 3: Talk to a Broker
Chat with a mortgage broker early. We’ll explain what you can afford, what can be improved, and guide you on your best options. No pressure, just good advice.
Step 4: Calculate Ratios
We’ll crunch the numbers for you. Things like GDS, TDS, and stress test results. These help figure out how much you could get approved for.
Step 5: Review Multiple Scenarios
We look at different down payments, interest rates, and loan terms. It’s all about finding the sweet spot that works best for your budget.
Step 6: Get Your Pre-Approval
We’ll send your application to one lender or more if needed. We handle the forms, credit checks, and can even lock in your rate for a while.
Step 7: Fix Anything That Needs Work
If something’s holding your approval back, like a bit too much debt or a low score, we’ll help you fix it. Even small changes can make a big difference.
Step 8: Pick Your Home
Once you’re pre-approved, you’re ready to start house hunting. You’ll know your budget and can make offers with confidence.
Improve Your Mortgage Approval Amount
Want to get approved for a bigger mortgage? Here are easy tips to boost your chances and increase your loan amount.
Pay down at least $500/month in debt
Chipping away at your debt can boost how much mortgage you can get. Even small monthly payments help.
Increase your down payment
Try saving more or using a gift from family. A bigger down payment can raise your approval and lower your monthly cost.
Add a co-borrower
Adding a spouse, partner, or parent can strengthen your application by combining incomes.
Extend amortization to 30 years
If allowed, a longer repayment period can lower monthly payments and improve approval chances.
Raise your credit score
Even a 20-point increase can make a difference. Pay bills on time and keep balances low.
Apply when rates are lower
Timing matters. Applying when rates are trending down can help you qualify for more.
Choose fixed or variable wisely
Depending on the market, picking the right type of mortgage can improve your approval and peace of mind.
Use our broker network
We work with many lenders, including ones open to unique situations. We’ll help match you with the right fit.
Common Pitfalls & How to Avoid Them
Thinking about a mortgage? Watch out for these common mistakes and learn how to avoid them for a smoother approval process.
Don’t spend your full pre-approval
Just because the bank says you can afford a certain amount doesn’t mean you should spend it all. Life is unpredictable. It’s better to leave some extra room in your budget for things that might come up.
Remember the closing costs
Buying a home isn’t just about the price. You’ll also need to pay for things like lawyers, inspections, taxes, and moving. These can cost a few thousand dollars, so plan for them early.
Finish all your paperwork first
Make sure your documents are ready. That includes your ID, proof of income, tax returns, and bank statements. Missing papers can slow things down or even mess up your deal.
Wait before applying for new credit
Hold off on getting a new credit card or car loan until your mortgage is done. Even small changes to your credit can hurt your approval or increase your rate.
Not all lenders work the same way
Some lenders are more flexible than others. One might say no while another says yes. That’s why it helps to work with a mortgage broker who knows which one fits your situation best.
Look out for hidden monthly costs
If you’re buying a condo, check the monthly fees. For houses, ask about heating and electricity bills. These costs can sneak up and change what you can really afford each month.
Helpful Canadian Programs
Looking to boost your mortgage approval in Canada? These helpful programs could make it easier to qualify and save you money.
Home Buyers’ Plan (HBP)
You can use up to $35,000 from your RRSP for your down payment without paying taxes right now. Just pay it back over 15 years to avoid extra fees.
First-Time Home Buyer Incentive
The government helps by sharing part of your home cost. This means your monthly mortgage payments are smaller. You pay back their share when you sell or refinance.
GST/HST Rebates
Buying a new home? You might get some of the GST or HST back, which can save you a good chunk of money.
Green Home Incentives
If your home is energy-efficient, you could get extra savings through rebates or grants. It helps your wallet and the planet.
Rural Housing Supports
Buying outside a big city? There are special programs that give you money or low-cost loans to help make it easier.
Mortgage Broker vs Bank: Why It Matters?
Choosing between a mortgage broker and a bank? Here’s why who you work with can affect how much you get approved for and at what rate.
More lender options
We work with many lenders, not just one bank, so you get more choices that suit your situation.
We know what fits
Every lender has different rules. We help match you with the one that fits your income, credit, and goals best.
One stop, many options
No need to call every bank. We compare rates and offers for you in one go.
Better rates and perks
We can find rate holds, ask for fee waivers, and help you get a better deal.
Personal guidance
We coach you on how to improve your file, so you feel confident and ready to close.
We’re with you long-term
Even after your mortgage starts, we’re here to help when rates change or it’s time to renew.
Life After Getting Approved
Got your mortgage approval? Here’s what happens next and how to stay on track as you move toward your new home.
Be smart while house hunting
Look for homes $20,000 to $40,000 below your approved amount. It gives you breathing room for extra costs or future changes.
Count the full cost
Think beyond the mortgage. Add up utilities, property taxes, home insurance, maintenance, and condo fees if any.
Don’t wait too long
Delays can lead to rate changes or even a new credit check from the lender. Keep your timeline tight and steady.
Lock your rate when ready
Once you find the right home, ask us to lock in your rate. It protects you from rising interest rates.
Keep your finances steady
Don’t make any big purchases, change jobs, or open new credit until after closing. It can affect your approval.
At Final Approval & Closing
You’re almost there! Here’s what to expect during final approval and closing so you can confidently seal the deal on your new home.
Final approval check
The lender will double-check your credit and job status before giving the green light.
Appraisal confirms the value
An appraiser checks that the home is worth what you’re paying for it.
Sign the final paperwork
You’ll review and sign the official mortgage documents with your lawyer or notary.
Money is sent, and you get the keys
The lender releases the funds, and the home is officially yours.
Hold off on new credit
Don’t take any new loans or credit cards before closing. It could delay or even cancel the deal.
After You Close: What Comes Next
Just got approved and closed on your mortgage? Here’s what happens next and how to stay on top of your new home journey.
Final check by the lender
They will look at your credit and employment again to make sure nothing has changed.
Home appraisal confirms the value
An appraiser checks that the home is worth the price you’re paying.
Time to sign your mortgage papers
You’ll meet with your lawyer or notary to review and sign the final documents.
Funds are sent and you get your keys
Once everything’s signed, the lender releases the money and the home becomes yours.
Avoid new credit before closing
Don’t apply for credit cards, loans, or big purchases. Even small changes can affect your approval.
Real-Life Family Stories
Curious how others managed their mortgage approval? These real-life family stories show what worked, what didn’t, and what you can learn from their journeys.
First-Time Buyers with 5% Down
Challenge: Tight budget, limited down payment
Solution: Used the Home Buyers’ Plan and First-Time Home Buyer Incentive
Outcome
We guided them through using RRSPs for their down payment and helped increase it to 10% using their seasonal work bonuses. They got approved fast and moved into their first home with confidence.
Used government programs smartly
Avoided overbudgeting and extra debt
Self-Employed Freelancer
Challenge: No T4 income, declined by bank
Solution: Matched with a lender that accepts business bank statements
Outcome
Instead of giving up, this freelancer came to us. We worked with a lender who reviewed business deposits instead of traditional income. Approval came in 3 weeks, and they moved in smoothly.
No T4s needed
Quick turnaround with the right lender
Growing Family Needing More Space
Challenge: Needed a bigger home, but limited income
Solution: Restructured debts and extended amortization
Outcome
They were stuck in a small space with growing needs. We helped adjust their finances to free up monthly room and raised their approval by $75,000. They found a new home without financial pressure.
Improved cash flow
Secured a larger mortgage without overextending
Final Thoughts
Getting pre-approved is more than just a formality. It helps you understand what you can afford, gives you a price range to shop within, and shows sellers that you’re ready to make a serious offer. It also helps you avoid surprises later by setting clear expectations from the start.
At AJP Mortgage, we’re here to make the process easy and stress-free. From reviewing your income and credit to explaining your options and helping you choose the right mortgage, we’ll guide you every step of the way.
Here’s what you can expect with us:
A simple and friendly process
Expert advice tailored to your situation
Clear numbers so you can plan with confidence
Support from start to finish
Curious about how much you can get approved for? Or want help finding the right mortgage for your needs?
Let’s talk. Your home journey starts with a conversation, and we’re ready when you are.
Contact AJP Mortgage today. We’ll help you take that first confident step toward your new home.
FAQs for Quick Answers
Can I use gifted money for a down payment?
Yes. Provide a signed gift letter and proof the donor has the funds.
How long is pre-approval valid?
Around 90–120 days, but your lender will advise.
Do interest rate changes affect my approval?
Generally yes. Higher rates = lower mortgage amount. But we lock rates when possible.
What about condos with high fees?
Those fees count in your GDS ratio. We’ll help you choose within comfort levels.
Is being self-employed a big challenge?
Not at all, as long as you have the right documents. Some lenders even specialize in working with self-employed borrowers.
When should I talk to a broker?
Start as early as possible, even before you begin house hunting. We can help you prepare and avoid costly surprises down the road.
