What Is a Mortgage Commitment Letter?

Once your offer is accepted, your lender issues a mortgage commitment letter — the document that turns 'we'll probably lend to you' into 'we will lend to you, on these terms.' It's one of the most important pieces of paper in your purchase, and understanding it can save you stress on closing day. Here's what's inside, how it differs from a pre-approval, and what to watch for.

Key takeaways

• A mortgage commitment letter is your lender's formal, written offer to finance a specific property.
• It's stronger than a pre-approval — it's tied to the actual home you're buying, not just an estimate.
• It spells out your loan amount, interest rate, term, amortization and any conditions you must satisfy.
• Conditions (appraisal, proof of income, down payment confirmation) must be met before financing is final.
• Read it carefully and have your real estate lawyer review it before you waive your financing condition.

What a commitment letter is

A mortgage commitment letter is the lender's official, binding-on-their-side offer to give you a mortgage on a particular property, subject to you meeting certain conditions. Unlike earlier stages, it's specific: it names the home, the exact loan amount, and the terms. It usually arrives after your offer is accepted and the lender has reviewed the property and your finances. If mortgages are still new to you, our guide to how mortgages work in Canada sets the stage.

It comes with an expiry

Commitment letters are time-limited and the rate is typically held only for a set window. Make sure your closing date falls inside that window, and don't sit on the letter — conditions and signatures often have tight deadlines.

What's inside the letter

Every commitment letter lays out the core terms of your mortgage in writing. Read each line — this is the deal you're agreeing to.

If you're weighing the rate type, our guide to fixed vs variable mortgage rates can help, and how mortgage amortization works explains the amortization figure.

Commitment letter vs pre-approval

People often confuse the two, but they sit at different stages of the journey. A pre-approval is an early estimate of what you can likely borrow; a commitment letter is the real offer for the actual home you're buying.

For the full distinction at the earlier stage, see pre-approval vs pre-qualification.

Meeting the conditions

A commitment letter is rarely unconditional. The lender almost always requires you to satisfy a list of conditions before the money is released. Common ones include:

• A satisfactory property appraisal confirming the home's value.
• Proof of income and employment.
• Confirmation of your down payment and its source.
• Verification you still pass the lender's requirements, including the stress test.

Don't waive financing too early

If your offer included a financing condition, don't waive it until your commitment letter's conditions are fully met. Have your real estate lawyer review the letter first — learn why in do you need a real estate lawyer in Ontario.

Get the best deal with HOMEH

A strong commitment letter secures your financing; HOMEH helps you keep more of the purchase price. Eligible buyers receive the industry's highest Cashback Rebate — money that can go straight toward your down payment or closing costs. Sellers list for 1%, or free when they also buy with HOMEH within 6 months, or $395 + HST with a Mere Posting.

Add cashback to your purchase

Estimate your rebate with the HOMEH cashback calculator, and see how it works in how HOMEH cashback works.