Mortgage Pre-Approval: Why do the numbers keep changing?

Tracy Head • January 11, 2023

From a broker’s perspective, trying to nail down an upper price point for clients is a little like (aging myself here) the sliding puzzles that were around when I was young.


I had a conversation with a young couple recently who were frustrated with a broker they were working with. They said every time they spoke with the broker their numbers seemed to change.


I explained a bit about how we calculate our pre-qualifications / pre-approvals and told them their broker is being very thorough to make sure they don’t end up writing a price point they won’t qualify for. I showed them how their broker is doing an amazing job of making sure they are set up for success.


Sometimes it gets frustrating on both ends being as it feels like the goal posts move faster than clients can find a suitable home to write an offer on. Having a rate hold in place helps eliminate part of this uncertainty.

Each mortgage application is slightly different. 


Each lender is slightly different.


Clients may have T4 income or self-employed income, as well as other sources including things like Child Tax Income, pensions, interest or dividend income, RRIF payments, and co-borrower income.


Likewise, down payments come from different sources:


  • Savings
  • Proceeds of sale from another property
  • RRSP (First Time Home Buyer withdrawals)
  • Gifts from family
  • First Time Home Buyer’s Incentive Program
  • Borrow sources (Flex Down Mortgages)


And of course the Stress Test comes into play.


If you don’t know about the stress test, the short version is that we have to qualify your mortgage application at either your contract rate plus two per cent or the Bank of Canada Benchmark rate, whichever is higher. The contract rate means the actual rate you will be approved at.


This calculation was a lot easier when fixed rates were below 3.25 per cent as we could use the Benchmark rate of 5.25 per cent and be certain of our numbers.


Right now most lenders have 4.89 per cent (plus or minus a little) available for a five year fixed rate on an insured mortgage. So I would run your calculations at 6.89 per cent and have a rate hold in place for you to be certain of your price point.


Easy, right?


Now we move onto the lender end of things. As an example, some lenders will use the full amount of CTC income. Others will only use a percentage.


Some lenders will accept down payment from the First Time Home Buyer’s Incentive program while others won’t.


Some lenders will finance properties with wood foundations, while others won’t.


You get the picture here – the calculations that work with one lender to maximize your price point may not work with the lender that will actually finance the home you’ve written your offer on.


My best advice if you are venturing into the world of home ownership is to take your time and do your homework. One of my columns from November talks about the challenges you can face if you don’t have your ducks in a row.


In many markets we need to help you maximize your mortgage amount just to get you into the market, so it will likely be several conversations before you have an exact number nailed down. Be patient with the process and learn as much as you can before you write an offer. The time invested upfront will help to make the process a smoother one for you.

Tracy Head

Mortgage Broker

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Challenges

By Tracy Head • November 29, 2025
The topics I’ve written about over the years are almost always a reflection of a common theme I’ve seen or challenge I’ve dealt with since the last column I wrote. This one is no different.  The last few months, and particularly the last few weeks, have been among the most challenging in my mortgage career. I say challenging but that might also mean stressful. When working with clients and finding the right fit for their mortgage I look at many different factors. Rate is obviously one of the most important considerations. I also try to get a solid understanding of my clients’ short and longer term goals. For instance if the clients are looking to upsize from a home in the city to a rural property with acreage I will look at chartered banks or credit unions instead of a monoline lender. If the clients are purchasing a lease-hold property there are only a few lenders that will provide financing so that narrows the field. If the clients want direct access to manage their mortgage themselves I will place them with one of my favorite lenders that has an amazing client portal. Sometimes despite the client and the broker doing everything possible to ensure a smooth mortgage process things go sideways. Due to incredibly high volumes over the last few months I’ve seen refinance at renewal mortgages delayed by days or weeks. The stress for everyone involved is overwhelming. The most valuable lesson I’ve learned as a mortgage broker came from a wise more-seasoned broker about ten years ago. She said to me “when things are going sideways on a file, don’t get caught up thinking about what’s going wrong – think about what you need to do to fix it.” I have been hearing these words on repeat the last two weeks, and I think this is helping to keep me (and my clients) on track. If things do appear to be going sideways for you, I encourage you to connect with your mortgage person for regular updates.

Changes Affecting Financing

By Tracy Head • November 14, 2025
I consider myself a lifelong learner, which is part of the reason I love my work. Every day there is something new and exciting to learn, or in some cases re-learn. When I first came back to the mortgage world a more seasoned broker gave me a copy of a handout she used with clients. It talked about the ten most important things NOT to do between removing your financing subject and finalizing the purchase of your home. At the time I remember thinking that the handout sounded patronizing and I assumed clients just understood they shouldn’t do any of the ten things. You know what they say about assuming things. Once or twice my clients have made decisions that have almost jeopardized their financing. The reason this came up for me right now is that I am working my way through a training course which is geared towards helping me re-design my team and my workflow, with the ultimate goal of providing even better support to my clients. One of the changes I am going to implement is adding a list very similar to the original ten things not to do list to my signing packages so that we are all on the same page and avoid any potential challenges down the road. What are the ten things? I won’t go over all of them, but here are a few of the things that have surfaced recently: If you change the closing date on your purchase or if you receive the Notice of Completion on a newly built home, advise your mortgage person right away. Never assume your realtor will do this for you. Do not go out and finance anything without checking with your mortgage person. If you are pushing the upper limit of your buying power even a small loan for furniture might put your financing at risk. Many lenders pull your credit again shortly before your mortgage finalizes. Along the same lines, make sure all of your payments are made on time. Do not co-sign a loan for anyone. Do not quit your job or change employers without talking to your mortgage person ahead of time. Do not spend any of the money you have tucked away for your down payment. If you have money sitting in higher-risk investment better to move them to something more stable in case of market fluctuations. Most people think that once they get the ok to remove their financing subject that their mortgage is a done deal. The small print on every mortgage commitment includes a clause that says something along the lines of “Your financing is based on your current situation. Material changes to your situation prior to the funding of your mortgage may affect your approval.” I’m currently working with a young lady that decided to purchase a boat between the time we had our pre-approval conversation and the day she wrote her offer to purchase. She had decided not to buy a home then found her dream property. We’ve had to look at a few options as the boat payment threw her ratios out of line. She is fortunate that her parents are very supportive and are going to gift her the money to pay off the boat loan, but if she didn’t have that back up plan the new loan would have reduced her borrowing power by over $100,000. The reason I added the comment “without checking with your mortgage person” in the bullets above is that every client’s situation is unique and some of those changes might be just fine. Some might not, and the last thing you want to do is find yourself scrambling to figure out a Plan B shortly before closing.  Best to have the conversation and be certain.