The Complete Guide to Getting a Mortgage in Canada (2026)

Buying a home is exciting, but figuring out the financing can be a lot to take in. How much should you put down? What will a lender look at? Should you choose a fixed or variable rate? And how early should you get pre-approved?

These are questions most home buyers have at some point.

The mortgage process in Canada becomes much easier to navigate once you understand what happens at each stage and what you can prepare ahead of time.

Whether you're a first-time home buyer, moving to your next home, refinancing an existing mortgage or purchasing an investment property, this guide covers the key things to know about getting a mortgage in Canada in 2026.

What Is a Mortgage?

A mortgage is financing used to purchase a home or other real estate. The property acts as security for the loan, and you repay the amount borrowed, plus interest, according to the terms of your mortgage agreement.  The interest rate matters, but it's only one part of a mortgage.

You'll also want to consider:

• Mortgage term

• Amortization period

• Fixed or variable interest rate

• Payment frequency

• Prepayment privileges

• Mortgage penalties

• Portability

• Other conditions attached to the mortgage

Looking at the full mortgage rather than focusing only on the advertised rate can help you choose financing that makes sense for both your current budget and your longer-term plans.

Step 1: Know What You Can Comfortably Afford

There's an important difference between the mortgage amount you may qualify for and the amount you're comfortable paying every month. Before you start house hunting, look at the full cost of owning the property, not just the mortgage payment.

Your budget should account for things such as:

• Household income

• Existing loans and monthly debt payments

• Down payment

• Property taxes

• Heating and utilities

• Condo or maintenance fees, if applicable

• Home insurance

• Closing costs

• Ongoing maintenance and repairs

Leaving some breathing room in your budget can also make unexpected homeownership expenses easier to manage.

Step 2: Plan Your Down Payment

Your down payment is the portion of the purchase price that you pay upfront rather than finance through your mortgage. In Canada, minimum down payment requirements depend on the purchase price of the property and the type of mortgage you're applying for. Putting more money down can reduce the amount you need to borrow, which may lower your mortgage payments and help you build equity sooner. But your entire savings account shouldn't necessarily become your down payment. You'll likely need money for closing costs and moving expenses, and maintaining an emergency fund after you move can be equally important.

For first-time home buyers in Canada, it's also worth learning about programs and registered savings options that may be available to help with a home purchase.

Step 3: Get a Mortgage Pre-Approval

Getting pre-approved before seriously shopping for a home can give you a much better idea of what your financing may look like. During a mortgage pre-approval, your financial information may be reviewed to estimate how much you could potentially borrow.

This can include your:

• Income and employment

• Credit history

• Current debts

• Available down payment

• Assets and other financial obligations

A pre-approval isn't the same as final mortgage approval. The property itself still needs to meet the lender's requirements, and your financial circumstances generally need to remain consistent. Still, getting pre-approved can be valuable for a few reasons.

You have a more realistic price range. Instead of starting your search based on assumptions, you can focus on homes that better fit your budget.

You understand your financing earlier. You'll have an opportunity to discuss potential mortgage options, payments and qualification requirements before making an offer.

Potential issues can be addressed sooner. Missing documents, credit concerns or questions about income are much easier to work through before you're facing a financing deadline.

Step 4: Understand How Your Credit Affects a Mortgage

Your credit history helps lenders understand how you've managed borrowed money in the past, but your credit score isn't the only factor considered when applying for a mortgage.

Lenders may review your:

• Payment history

• Outstanding balances

• Credit utilization

• Length of credit history

• Types of credit

• Recent credit activity

If you're preparing to apply for a mortgage, consistent financial habits can help. Pay your bills on time, keep revolving balances manageable and avoid applying for unnecessary new credit before closing. It's also a good idea to review your credit report periodically so you have time to address any inaccuracies.

Step 5: Prepare Your Mortgage Documents

One of the easiest ways to make the mortgage approval process smoother is to have your documents ready.

Exactly what you'll need depends on your employment, income, down payment and the type of property you're buying, but common mortgage documents may include:

• Government-issued identification

• Employment letter or confirmation

• Recent pay statements

• T4 slips

• Notices of Assessment

• Bank or investment statements

• Proof of down payment

• Documentation showing the source of your down payment

• Details of existing debts or properties

Self-employed borrowers may be asked for additional documents depending on how their income is earned and reported. If part of your down payment is coming from a gift, the sale of another property or another source, additional documentation may also be required.

Step 6: Compare Your Mortgage Options

There isn't one mortgage that's best for every Canadian borrower. The right structure depends on your finances, plans for the property, tolerance for changing payments or rates, and how much flexibility you may need during the term.

Fixed vs. Variable Mortgage

With a fixed-rate mortgage, your interest rate is set for the mortgage term. This provides greater predictability when it comes to your rate and, depending on the product, your payments.

With a variable-rate mortgage, the interest rate is connected to the lender's prime rate and can change during your term.

Choosing between a fixed and variable mortgage isn't simply about predicting where rates will go. Consider how comfortable you would be with changes, how long you expect to keep the property and what matters most to your overall financial plan.

Open vs. Closed Mortgage

An open mortgage generally gives you more flexibility to make additional payments or repay the mortgage without the same restrictions as a closed mortgage. That flexibility often comes at a higher interest rate.

Closed mortgages typically have limits on how much you can repay early without triggering a penalty, although many include annual prepayment privileges.

Choosing a Mortgage Term

The mortgage term is the period your current mortgage agreement remains in effect before you renew, refinance or pay it off.

Common mortgage terms in Canada include one, two, three and five years, although other options may be available.

Don't automatically assume the longest term or lowest rate is the best choice. Think about where you expect to be financially and personally over the next few years.

For example, are you likely to move? Sell the property? Refinance? Make significant lump-sum payments?

Those plans can influence which mortgage structure makes the most sense.

Step 7: Make an Offer and Finalize Your Mortgage Approval

Once you've found a property and your offer has been accepted, your mortgage moves from the planning stage toward final approval. Even if you've already been pre-approved, the lender still needs to approve the specific property and confirm that your application continues to meet its lending requirements. At this stage, you may be asked for updated documents or additional information.

The lender may need to confirm:

• Purchase price and property details

• Income and employment

• Source of down payment

• Current debts

• Property appraisal, when required

• Other conditions of the approval

This is also why it's important to avoid major financial changes between your pre-approval and closing date. Taking out a new car loan, increasing credit card balances or changing employment could affect your mortgage qualification.

Step 8: Prepare for Closing

Once your mortgage has received final approval and the conditions have been satisfied, you'll move toward closing. Your lawyer or notary will handle much of the legal process, including the transfer of ownership and registration of the mortgage.

Before closing, you may need to arrange or confirm:

• Home insurance

• Remaining down payment funds

• Closing costs

• Legal documents

• Identification

• Any outstanding lender requirements

Depending on the purchase, closing costs can include legal fees, land transfer taxes, title insurance, adjustments and other expenses. Planning for these costs ahead of time can make closing day considerably less stressful.

Mortgage Mistakes That Can Cause Problems

A mortgage approval can involve several moving parts. A few seemingly small decisions can create complications, particularly after you've made an offer.

Shopping Before Understanding Your Budget

It's easy to start looking at listings before talking about financing. The problem is that your assumed budget and actual qualification may be very different. Understanding your numbers first gives you a more useful starting point.

Changing Jobs Before Closing

A change in employment can affect how a lender views your income, particularly if you're entering a probationary period, changing industries or moving from salaried to variable or self-employed income. If you're considering a job change while buying a home, speak with your mortgage professional before making the move.

Taking On New Debt

That new vehicle might fit comfortably into your monthly budget, but a new loan or lease can change the debt ratios used to qualify your mortgage. Try to keep your financial picture stable between approval and closing.

Missing Payments

Continue paying credit cards, loans and other obligations on time throughout the home-buying process. Your credit can be reviewed again before the mortgage closes.

Using All Your Savings for the Down Payment

The down payment is only part of the cash you'll need. Legal fees, taxes, moving costs, adjustments and unexpected expenses can add up quickly. Keeping some savings available after closing can give you more flexibility.

Why Work With a Mortgage Broker?

A mortgage broker helps borrowers navigate mortgage options from the lenders and products available to them. Rather than looking only at the interest rate, a mortgage professional can help you consider qualification requirements, mortgage features, penalties, prepayment options and how a particular product fits your plans.

Mortgage brokers can assist with many different financing situations, including:

• First-time home purchases

• Mortgage renewals and transfers

• Mortgage refinancing

• Investment properties

• Self-employed mortgages

• Financing for newcomers to Canada

• Debt consolidation

• Reverse mortgages

• Construction and renovation financing

Every borrower has a different financial picture. The mortgage that works well for one person may be completely wrong for another. That's why understanding the borrower should come before choosing the product.

Frequently Asked Questions About Mortgages in Canada

How long does mortgage approval take in Canada?

There isn't one standard timeline. Approval depends on the lender, the complexity of the application, the property and how quickly the required documentation can be provided. Having your income, down payment and other documents organized ahead of time can help avoid unnecessary delays.

How much down payment do I need to buy a home in Canada?

The minimum down payment depends on factors including the property's purchase price and applicable mortgage insurance and lending requirements. The minimum isn't necessarily the amount that's right for your budget, so it's worth comparing different down payment scenarios before purchasing.

Can I buy a home in another province?

Yes. Canadians can purchase property in another province, whether they're relocating, investing or buying a second home. The financing process may be similar, but provincial taxes, legal processes, closing costs and property considerations can differ.

Should I get pre-approved before house hunting?

In most cases, getting a mortgage pre-approval before seriously shopping for a home is a good idea. It can help establish a more realistic price range and gives you time to identify financing issues before you've committed to a property.

Can I get a mortgage if I'm self-employed?

Yes. Being self-employed doesn't prevent you from qualifying for a mortgage. The way your income is documented and assessed may differ from someone receiving a traditional salary. Depending on the lender and mortgage program, additional business or tax documentation may be required.

Is the lowest mortgage rate always the best mortgage?

Not necessarily. Rate is important, but so are penalties, prepayment privileges, portability, restrictions and other mortgage terms. A slightly different rate on a mortgage with features that better suit your plans could be more valuable than choosing a product based on rate alone.

Getting a Mortgage in Canada: What to Remember

You don't need to become a mortgage expert before buying a home. But understanding the basics can help you ask better questions and make more informed decisions.

Start with your budget. Prepare your down payment and documents. Get pre-approved before seriously shopping. And when comparing mortgages, look beyond the interest rate to understand how the entire product works.

Most importantly, your mortgage should fit your financial situation rather than forcing your financial situation to fit the mortgage.

Whether you're buying your first home, moving, renewing your mortgage, refinancing or investing in real estate, having a clear plan before you make a decision can make the process considerably easier.

At Sherwood Mortgage Group, our mortgage professionals work with a range of lending partners to help Canadians understand the financing options available to them. From first-time home buyers and mortgage renewals to refinancing, self-employed financing and investment properties, our goal is to help you understand your options and make an informed decision.

Thinking about your next move? Contact Sherwood Mortgage Group to talk through your mortgage goals and available options.