Why You Might Be Getting Pre-Approved for Less Than You Expect

Josh Perez • October 31, 2025

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.

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Deposit vs. Down Payment: Key Differences for Homebuyers

By Josh Perez • February 18, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.
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Is a 5% Down Payment a Mistake? Here’s the Unpopular Truth.

By Josh Perez • February 15, 2026
Discover why a 5% down payment isn’t always irresponsible. Learn when a low down payment is a smart financial move for Ontario homebuyers and when it’s a risk.