The Rate Window Is Closing: Why Getting Pre-Approved Now Matters

Thinking about buying a home but waiting for interest rates to drop a little more? You may want to reconsider your timeline.

The Bank of Canada has held its policy interest rate at 2.25%, following a series of cuts since 2024. Lower borrowing costs and softer home prices have given buyers some relief, particularly in markets like Toronto.

But that relief may be slowing down.

What RBC Is Saying About 2027

RBC Economics reports that housing affordability is improving at a slower pace. It expects interest rates to rise modestly through 2027 and forecasts that the Bank of Canada could begin raising its policy rate next year.

These are forecasts, not guarantees. But they are a reminder that waiting for lower rates doesn't necessarily mean you'll get a better deal.

If mortgage rates rise, your monthly payments could increase, and the amount you qualify to borrow could decrease.

That's why getting financially prepared now is worth considering, even if you're still a few months away from buying.

Why a Mortgage Pre-Approval Matters

A mortgage pre-approval gives you a clearer picture of what you can afford before you start looking at homes.

A lender reviews your income, debts, credit history and down payment to estimate how much you may be able to borrow.

Depending on the lender, you may also be able to secure a mortgage rate for a limited period, often 90 to 120 days.

That means if rates rise during your rate-hold period, you may still qualify for the rate you secured. If rates fall, your lender may offer you the lower rate, depending on its policies.

Keep in mind that a pre-approval is not a final mortgage approval. Your finances and the property you choose will still need to meet the lender's requirements.

What Happens If You Wait?

Let's say you've been watching the market and hoping to buy in early 2027.

You may find that home prices have changed, mortgage rates have increased or your borrowing power isn't quite what you expected.

On the other hand, prices could fall or better mortgage offers could become available.

Nobody knows exactly where the market is heading.

A pre-approval doesn't commit you to buying a home. It simply helps you understand your options and gives you time to plan.

It also allows you to focus your search on homes that fit your budget instead of falling in love with a property you may not be able to afford.

Prepare Now. Move When You're Ready.

Buying a home is a big decision, and interest rates are only one part of it.

Your income, savings, monthly expenses, lifestyle and long-term plans matter just as much.

Before making a move, speak with a mortgage professional, review your finances and make sure you're comfortable with the monthly payments—not just the maximum amount you're approved to borrow.

The best thing you can do right now? Get in touch with a mortgage broker.

Even if you're not ready to buy just yet, a mortgage broker can help you understand what you qualify for, explore your options and see whether you can secure a rate today.

Don't have a mortgage broker? We can connect you with a trusted professional who can help you get started.

Let's get you prepared so you're ready when the right home comes along.