How To Qualify for a Mortgage in Canada: Tips for2025
How to Qualify for a Mortgage in Canada: Tips for 2025
Updated advice to help you secure the best mortgage deal this year
Thinking of buying a home in 2025? Whether you're a first-time buyer or looking to upgrade, qualifying for a mortgage in Canada requires more than just good credit. With interest rates, lender guidelines, and stress tests evolving, here's what you need to know to get approved in today’s market.
Know Your Credit Score and Improve It if Needed
Your credit score is one of the first things lenders check. In Canada, a score of 680 or higher is considered ideal for the best rates — especially with traditional "A" lenders.
Tips to boost your score:
Pay all bills on time
Keep credit utilization under 30%
Avoid opening too many new accounts
Save for a Strong Down Payment
In 2025, minimum down payment requirements in Canada are:
5% for homes under $500,000
5% on the first $500,000 + 10% on the remainder up to $1M
20% for homes over $1 million
A higher down payment can reduce your monthly payment, avoid mortgage insurance, and increase your approval chances.
Understand the Mortgage Stress Test
Even if you qualify at your contract rate, you must also qualify at the higher of your rate + 2% or the current stress test benchmark rate (around 5.25–6.25% as of early 2025).
Pro tip: Budget based on the stress test amount, not just your pre-approval, to avoid surprises.
Reduce Your Debt-to-Income Ratio
Lenders will calculate your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. Ideally, your monthly housing costs should not exceed 39% of your gross income, and your total debts should stay under 44%.
What to do:
Pay down credit cards and car loans
Avoid new financing until after you’ve closed on your home
Have Stable, Verifiable Income
Most lenders prefer salaried employees with at least 2 years of steady income. If you're self-employed, you may need:
2 years of tax returns
Business financials
A higher down payment or alternative lenders
Work with a Mortgage Broker
A broker gives you access to multiple lenders, including major banks, credit unions, B-lenders, and private lenders. They’ll match your situation to the right product and help you prepare your application.
Bonus: Many brokers, like myself, offer personalized advice and work with clients across Quebec and Canada — often at no cost to you.
Get Mortgage-Ready in 2025
Qualifying for a mortgage today means being informed, prepared, and strategic. Whether you’re buying in Montreal, Toronto, or anywhere in between, I’m here to help you navigate the process and secure the right mortgage for your needs.
Contact me today to start your mortgage pre-qualification and get one step closer to homeownership in 2025.