Qualification and Stress Test

Canadian qualification language is built around affordability math, documentation, and stress-test rules. These pages explain the terms borrowers hear during pre-approval, underwriting, and final approval.

Use This Section When

• you are preparing for pre-approval or full application
• you need to understand GDS, TDS, and stress-test language
• you want to know what documents the lender is likely to request
• you are trying to separate quick estimates from real approval conditions

Start Here

• Pre-Approval
• Prequalification
• Income Verification
• Proof of Funds
• Mortgage Stress Test
• Gross Debt Service Ratio
• Total Debt Service Ratio
• Loan-to-Value Ratio
• Minimum Down Payment

Common Reader Paths

• “How serious is this approval?”: Pre-Approval, Prequalification
• “What numbers does the lender care about?”: Mortgage Stress Test, Gross Debt Service Ratio, Total Debt Service Ratio
• “How much leverage is the lender looking at?”: Loan-to-Value Ratio, Minimum Down Payment
• “What proof do I need to show?”: Income Verification, Proof of Funds

Why This Section Matters

Many borrowers think approval turns only on income or credit score. In practice, Canadian lenders also want documented income, evidence of funds, and a file that still works under higher qualifying assumptions.

Continue to Nearby Sections

• Use Down Payment and Default Insurance when the next question is insured borrowing.
• Use Closing Costs and Closing Process when the file is moving from approval to funding.

In this section

• Gross Debt Service Ratio
  Qualification ratio that measures housing costs against gross income in Canadian underwriting.
• Income Verification
  Documents and review steps lenders use to confirm employment, earnings, and income stability.
• Loan-to-Value Ratio
  Ratio between mortgage amount and property value that shapes insurance, refinance, and equity limits.
• Mortgage Stress Test
  Qualification rule that tests affordability using a rate above the contract rate.
• Pre-Approval
  Early lender assessment that estimates borrowing capacity without guaranteeing final approval.
• Prequalification
  Informal early affordability estimate that carries less lender commitment than pre-approval.
• Proof of Funds
  Evidence that the borrower can supply the down payment, closing costs, and other required cash.
• Total Debt Service Ratio
  Qualification ratio that adds other debt payments to housing costs when measuring affordability.