Obtaining a mortgage pre-approval is a crucial step if you want to eliminate uncertainty along your home-buying journey.
A mortgage pre-approval not only helps determine the maximum amount a lender is willing to lend, but it also gives potential homebuyers an edge in the competitive real estate market.
With the advent of technology, online mortgage pre-approvals have become a popular choice for Canadians looking for convenience and efficiency.
However, with so many options available, it can be challenging to determine which online service is the best fit.
In this article, we will explore the six best online mortgage pre-approvals in Canada to help you make an informed decision.
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6 Best Online Mortgage Pre-Approvals in Canada
All the five big banks offer mortgage pre-approvals. However, RBC, BMO, TD, and Scotiabank allow you to apply for pre-approval online.
Other financial institutions that offer online mortgage pre-approvals in Canada include National Bank and Butler Mortgage.
Bear in mind that this is by no means an exhaustive list of all the online mortgage pre-approval providers in Canada. Rather, it’s a compilation of some of the best options based on personal experience and the experience of others.
Let’s go into the details!
1. RBC Mortgage Pre-Approval
RBC mortgage pre-approval guarantees a mortgage rate for up to 120 days.
To apply with RBC, you will need to indicate the purpose of your application, such as buying real estate or transferring your mortgage to RBC.
Once you have selected one of the options, you will be required to provide your home and contact address before choosing a mortgage specialist.
Upon filling out the application form, an RBC mortgage specialist will get in touch with you within 24 hours to assist you with the process.
Click here to apply for a pre-approval with RBC.
READ ALSO: RBC Mortgage Promotions Review
2. TD Mortgage Pre-Approval
TD offers mortgage approval through three different channels — online, in-person, or by phone. With a TD, you can lock in a rate for up to 120 days.
To apply for a mortgage, you’ll need to provide TD with your personal, employment, and asset information.
The best part about applying with TD online is that it won’t hurt your credit score.
Furthermore, individuals with no credit history can also apply for a TD pre-approval. This is particularly beneficial for new Canadians or permanent residents who have been in the country for less than five years.
Click here to apply for a pre-approval with TD.
3. BMO Mortgage Pre-Approval
With BMO, you can apply for a pre-approval online and get up to 130 days rate guarantee.
You can apply with BMO as a single or jointly with your spouse or common-law partner.
To qualify with BMO, you need to:
- Be a Canadian resident
- Be employed for at least 2 years
- Reached the age of majority in your province or territory
- Apply for a residential mortgage
You will be required to provide information and documents about the following when applying with BMO:
It takes less than 10 minutes to apply for a pre-approval online with BMO and you will get feedback within a day or two.
Click here to apply for a mortgage pre-approval with BMO.
4. Scotiabank Mortgage Pre-Approval
Scotiabank also provides an opportunity to obtain a mortgage pre-approval online with a 60-130 days rate guarantee.
After completing the application, you can easily download your pre-approval letter featuring the mortgage rate and terms.
Once you’ve found a suitable property and made an offer, you can submit your complete mortgage application and all necessary documentation through Scotiabank eHOME.
The Scotiabank eHOME platform operates entirely online, eliminating the need to visit a branch.
Click here to apply for a mortgage pre-approval with Scotiabank.
5. National Bank Mortgage Pre-Approval
You can also apply for a mortgage pre-approval online with National Bank and get a 90 days rate guarantee.
Upon applying, National Bank will issue your pre-approval certificate within 2 business days of application.
However, you must meet the following eligibility to qualify with a National Bank:
- Live in Canada at the time of application
- Reached the age of majority in the province or territory you’re applying in.
- You (and your co-borrower if applicable) must be employed
- The pre-approval should be for a property located only in a Canadian province not in any of the three territories.
- Be willing to live at the property
- You (and your co-borrower if applicable) must currently have a minimum of one property whether individually, jointly, or with a third party
- Apply for yourself not a third-party
Click here to apply for a pre-approval with National Bank.
6. Butler Mortgage Pre-Approval
Butler offers access to some of the best mortgage rates in Canada. The interesting part is that Butter operates entirely online.
Unlike the above banks, Butler is an online mortgage broker that serves as a middleman between lenders and borrowers.
As a mortgage broker, Butler provides you access to different mortgage providers in Canada. The broker can help you access a pre-approval online with up to 120 days rate guarantee.
To get started, you will be required to fill out an online form by providing your:
- Phone and email
- Approximate mortgage amount
- Credit rating
Once you complete the online form, a Butler representative will contact you, learn more about you and answer any questions to get you the perfect mortgage pre-approval.
Click here to apply for a mortgage pre-approval with Butler.
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How to Choose the Best Online Mortgage Pre-Approval in Canada
As a beginner, it can be difficult deciding which financial institution to get mortgage pre-approval from. Consider the following factors to ease your selection.
- Mortgage rates: Mortgage rates are a critical factor to consider when selecting a mortgage pre-approval. Lower rates can translate into lower monthly payments, saving you money over the life of your loan. Be sure to compare rates from multiple lenders to get the best deal.
- APR: The APR or annual percentage rate takes into account not only the interest rate but also any fees associated with the mortgage. It gives a more accurate picture of the cost of borrowing and should also be considered when selecting a pre-approval.
- Terms and conditions: Carefully read the terms and conditions of any mortgage pre-approval before accepting it. Look out for penalties for early repayment, balloon payments, and adjustable interest rates that could lead to increased monthly payments down the line.
- Application process: The mortgage pre-approval application process can be time-consuming and complicated, so it’s important to select a lender with a streamlined process. In most cases, online lenders offer a quicker and more convenient application process compared to traditional lenders.
Overview of Mortgage Pre-Approval
Mortgage pre-approval is a process where a lender evaluates a borrower’s financial status and determines the maximum amount of money they can borrow to purchase a home.
This is an important step in the home-buying process because it provides you (the borrower) with a clear understanding of your purchasing power.
During the pre-approval process, the lender will review your credit score, income, assets, and other factors. The more information a lender has about you, the better.
Based on this information, the lender will determine the maximum amount of money you can borrow and provide a pre-approval letter stating this amount.
A pre-approval letter is not a guarantee of a loan, but it gives you an advantage when applying for a mortgage. It shows home sellers that you’re serious about purchasing a home and have already taken steps to secure financing.
Pros of Mortgage Pre-Approval
- Rate guarantee: Pre-approval also allows the borrower to lock in an interest rate for some time. This gives the borrower some protection from interest rate fluctuations while they search for a home and complete the mortgage application process.
- Customized estimate: Mortgage pre-approval allows the borrower to receive a customized estimate of how much they can borrow and what their monthly payments will be based on their financial situation. This helps the borrower plan their finances better and determine the price range of the homes they can afford.
- Eases comparison: With pre-approval in hand, borrowers can easily compare mortgage offers from different lenders and choose the one that best meets their needs. This makes it easier to compare loan terms, interest rates, and other fees associated with the mortgage.
- Facilitate mortgage application: Pre-approval can also speed up the mortgage application process since the lender has already reviewed the borrower’s financial information and credit history. This can reduce the time and effort required to complete the application and may result in faster loan approval.
Cons of Mortgage Pre-Approval
- No guarantee: Mortgage pre-approval does not guarantee that a lender will provide a loan or the exact terms of the loan. Even if you are preapproved, your application may still be denied if your financial situation changes or if there are issues with the property.
- Hard credit check: Mortgage pre-approval requires a hard credit check, which can temporarily lower your credit score. This can be a disadvantage if you are planning to apply for other loans or credit cards in the near future, as multiple hard inquiries can further reduce your score.
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