Why You Might Be Getting Pre-Approved for Less Than You Expect
If you’ve been surprised by a lower-than-expected mortgage pre-approval amount, you’re not alone—and there’s usually one main reason: debt.
It’s not just about how much you make; it’s about how much of that income is already spoken for.
"We've seen people making six figures get approved for less than someone making $70,000 a year—because the higher earner had two car loans, a line of credit, and a student loan, while the lower earner had zero debt and a clean file." — Josh Perez
When lenders review your application, they don’t care much about your lifestyle—they care about ratios. If your debt servicing ratios (the percentage of your income that goes toward debt payments) are too high, it doesn’t matter how big your paycheque is—you’ll hit a cap.
Before you start house hunting, take a close look at your liabilities:
- Car loans
- Credit cards
- Lines of credit
- Student loans
Even small adjustments—like paying down a balance or restructuring existing debt—can make a big difference in how much you qualify for.
Here’s the part most people don’t realize: not all banks calculate your income and debts the same way. That means your approval could vary significantly depending on which lender reviews your application.
That’s why it’s so important to work with an experienced mortgage broker who represents you, not the bank. A broker can compare multiple lenders, spot the differences in their calculations, and help you find the approval strategy that gives you the most buying power.
Not all banks and lenders calculate your income and your debts the exact same way.” — Josh Perez
This is where strategy matters. The right mortgage professional can identify which lenders view your situation most favourably—and help you increase your buying power without changing your income.
Want to know which lender will give you the best approval?
Book a quick discovery call with Josh to review your debt structure and uncover your full borrowing potential.
