How are my finances reviewed for mortgage approval?
Key Points
Your mortgage lender looks at how much of your income goes towards housing costs.
Lenders also check how much of your income goes towards all your debts, including your mortgage.
You'll need to show you can afford your mortgage even if interest rates go up.
Your mortgage insurer has guidelines on how lenders calculate if you can afford a mortgage.
Small changes to your application might be okay without starting over, as long as they fit within certain limits.
Technical Research Verification
Our systems synchronized 4 data points and regulatory frameworks to verify this technical brief.
Related Questions
How does the stress test differ for fixed vs. variable in 2026?
Both are stress-tested at the higher of the benchmark (5.25%) or the contract rate + 2%.
Why are 3-year fixed rates dominating the 2026 market?
Borrowers are hesitant to lock in for 5 years at current levels, but find 1-2 year rates too expensive.
Fixed vs. Variable Comparison Table
Fixed locks a 5-year rate with IRD penalty risk; variable floats with prime and typically caps break fees at 3 months interest.
What is the 'IRD' penalty risk for 5-year fixed borrowers?
The Interest Rate Differential (IRD) can cost tens of thousands if you break a fixed mortgage when market rates have dropped.