Two terms that people frequently mix up are mortgage pre-qualification and pre-approval. Both are early steps in the mortgage process and home buying journey, but have a few key differences. A mortgage pre-qualification usually happens first and occurs when a mortgage provider assesses your financial information, including your total debts, income and assets, and provides you with an estimate of the maximum mortgage you’d likely qualify for. It is important to note that when it comes to taking out a mortgage, you will be subject to the Canadian stress test, which are qualifying criteria that can prove you can afford your monthly mortgage payments, should interest rates rise. A pre-qualification isn’t the most accurate assessment, but it is an incredibly helpful tool in guiding your home search.