In short
They verify your income, credit, debts, down payment and documents, and confirm the home is acceptable to lend on.
Pre-approved isn't the same as approved. Underwriting is the step that turns one into the other.
What underwriting means
Underwriting is the lender's full review before it commits to your mortgage. It turns a pre-approval, or a financing condition in your offer, into a firm approval.
An underwriter checks two things: whether you can carry the loan, and whether the property is good security for it.
Underwriting happens for every mortgage, whether you go through a bank directly or a mortgage broker. The difference is who prepares and submits the file.
What lenders verify
On your side, they confirm income and employment, review your credit report, check that your down payment comes from an acceptable source, and recalculate your debt ratios at the stress test rate.
On the property side, they may order an appraisal to confirm the value, and review details such as the type of home, its condition and, for condos, the fees and corporation's finances.
If your down payment is under 20%, a mortgage insurer such as CMHC also reviews the file. Insured mortgages must fit limits like 39% GDS and 44% TDS.
If something doesn't line up, such as a gap in employment or a gift for your down payment, the underwriter will ask for an explanation or a document. A signed gift letter from a family member is a common request.
How long it takes in Ontario
Many Ontario offers include a financing condition, often around five business days, though it is negotiable. Underwriting has to be done inside that window, so delays matter.
Lenders often come back with conditions, such as a recent pay stub or a bank statement showing your down payment. Answer quickly and completely. Avoid new debt, large unexplained deposits and job changes until you close.
Once underwriting is complete, the lender issues a commitment letter setting out the approved amount, rate and any remaining conditions. Read it carefully and share it with your lawyer.
If you've negotiated a short financing condition, tell your lender the deadline on day one.
Common questions about underwriting
How long does mortgage underwriting take in Ontario?
It often takes a few business days once the lender has all your documents, but timing varies by lender and file. Appraisals and missing paperwork are the usual causes of delay. Send everything early so your financing condition doesn't run out.
Can you be denied after pre-approval?
Yes, a mortgage can still be declined at underwriting. Common reasons include a low appraisal, income that can't be verified, new debt or a change in employment. Keeping your finances steady after pre-approval lowers that risk. If it happens, your mortgage professional may be able to find another lender.
What does a mortgage underwriter look for?
An underwriter looks for proof that you can afford the payments and that the property supports the loan. That means verified income, acceptable credit, a documented down payment and debt ratios within limits, plus an acceptable value and property type. Consistency matters: the numbers on your application should match your documents.
What is a financing condition?
A financing condition lets a buyer cancel the purchase if they can't get mortgage approval by a set date. It gives your lender time to underwrite the file. Your lawyer and agent can explain how it's worded in your agreement of purchase and sale.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.