Buying a home in Ontario is a dream for many, but qualifying for a mortgage can feel overwhelming.
Here’s a step-by-step guide to qualifying for a mortgage in Ontario in 2025.
Step 1: Check Your Credit Score
Lenders use your credit score to assess risk. A score above 680 is ideal for competitive rates. Pull your report from Equifax or TransUnion and fix errors early.
Step 2: Assess Your Income and Debt
Lenders look at your debt-to-income ratio (DTI). In Ontario, aim for a DTI below 42%. Pay down high-interest debt to improve your chances.
Step 3: Save for a Down Payment
A minimum 5% down payment is required for homes under $500,000, but 20% avoids costly CMHC insurance. For a $600,000 home, that’s $120,000.
Step 4: Gather Documentation
Prepare pay stubs, tax returns, and bank statements. Self-employed? You’ll need two years of tax returns to prove income.
Step 5: Get Pre-Approved
A pre-approval locks in a rate and shows sellers you’re serious. It also sets your budget, crucial in Ontario’s competitive markets like the GTA.
Step 6: Work with a Mortgage Expert
Ontario’s mortgage rules, like stress tests, can be complex. A professional can navigate options and find the best rates.
Why Choose Us?
As your Ontario mortgage expert, we’ll simplify the process and tailor solutions to your needs. Don’t let confusion hold you back - contact us now to secure your dream home in 2025!