What Is a Condition of Financing?
When you make an offer on a home in Ontario, you can include a condition of financing (sometimes called a financing condition). It gives you a short window — often around five business days — to confirm a lender will approve a mortgage for that specific property before your offer becomes firm and binding.
Think of it as a safety check between “I’d like to buy this home” and “I’m fully committed to buying this home.”
Why it matters
A pre-approval tells you what you can likely borrow. A condition of financing confirms the lender is comfortable with this particular property too — because lenders assess the home itself, not only your finances.
The upside
Protects your deposit
If financing can’t be arranged, you can walk away within the condition period and recover your deposit, per the wording of the clause.
Confirms the property qualifies
Lenders may order an appraisal or review the home’s condition, and this window makes room for that.
Time to finalize details
Your broker can lock your rate, confirm the approval, and clear any lender conditions before you’re committed.
Peace of mind
You’re not bound to a purchase you can’t fund.
The trade-offs
Should you use one?
That depends on your situation — how strong your approval is, your down payment, and how competitive the market is. Some buyers with solid pre-approvals choose to go without one to win a home. That’s a real risk decision, and a pre-approval on its own doesn’t guarantee financing on a specific property.
This is where “I advise, you decide” comes in: I’ll walk you through what that risk actually looks like for your offer, and you make the call with clear eyes.
Thinking about an offer?
Let’s make sure your financing is solid first.