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Conditions of approval are the specific outstanding items — such as an appraisal, updated income documents, or proof of down payment — that a borrower or broker must satisfy before a conditional approval becomes a firm commitment letter.
The underwriter — or, for high-ratio files, the default insurer — decides exactly which conditions apply to a file. They typically split into property-related items, such as a satisfactory appraisal, and borrower-related items, such as an updated Notice of Assessment or proof the down payment has cleared.
Once every listed condition is reviewed and satisfied, the file moves from conditional approval to a firm commitment letter. A file can still be declined if a condition can’t be met — for example, an appraisal that comes in below the purchase price.
Set by the underwriter: the underwriter — or, for high-ratio files, the default insurer — determines exactly which conditions must be satisfied.
Property and borrower conditions: conditions typically split between property-related items (appraisal, insurability) and borrower-related items (updated income documents, proof of down payment).
Broker coordinates collection: mortgage agents (Ontario, FSRA), submortgage brokers (BC, BCFSA), mortgage associates (Alberta, RECA), and courtiers hypothécaires (Quebec, AMF) typically manage gathering and submitting the outstanding items.
Unmet conditions can stall or end a deal: a file can still be declined if a condition — such as an appraisal below purchase price — cannot be satisfied.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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