Income Changes & Life Events

Lenders fall into two camps on this. The good ones will qualify you at your full regular salary if you provide an employer letter confirming your return date, your position, and your salary. They treat the leave as temporary and your income as stable.

The strict ones will only count your current EI maternity or parental benefits — which are capped at $668/week in 2026. That dramatically reduces what you qualify for. Banks are more likely to take this approach. Monoline lenders through a broker are often more flexible.

What you need: An employer letter on company letterhead stating your name, position, salary, leave start date, expected return date, and confirmation your position is guaranteed. Most lenders also want your most recent pay stub from before leave started.

The return-to-work letter should confirm: your return date, your position, and your salary. Most lenders treat this the same as any employment verification — once you're back, you're back.

If you haven't returned yet but have a confirmed date within 30-60 days, some lenders will still qualify you at full salary. Others want you physically back at work first. Timing your application around your return date can make a significant difference in how many lenders are available to you.

EI maternity/parental benefits: Temporary. Most lenders prefer to qualify you on your return-to-work salary, not EI. If you have no employer to return to, EI alone is usually not enough.

CPP disability: If permanent, most lenders count this as stable income. You'll need a CPP disability confirmation letter showing the monthly amount.

Long-term disability (LTD): Accepted by most lenders if the benefit is ongoing and unlikely to end before the mortgage term. A letter from the insurer confirming the benefit amount and duration is required.

Child support / spousal support: Can count as income if you can demonstrate consistent receipt — typically 3-6 months of bank statements showing regular deposits, plus the court order or separation agreement specifying the amount and duration. If support is set to end within 3 years, some lenders won't count it.

WSIB/WCB: Workers' compensation benefits are generally accepted if they are long-term or permanent. Short-term WCB while recovering from an injury is harder to use.

Canada Pension Plan (regular CPP, not disability): Accepted as retirement income. OAS is also accepted.

Pre-approval is based on the information you provided at the time. Most mortgage commitments contain a clause requiring you to disclose any material change in circumstances before closing. Material changes include: job loss, hours reduction, salary cut, going on leave (medical, parental, or otherwise), taking on new debt (car loan, credit card balance, co-signing for someone), or change in marital status.

What a broker can do: If your income changes mid-transaction, call me immediately. I may be able to find an alternative lender with different qualification criteria, restructure the application with a co-borrower, or negotiate a closing extension to give you time to stabilize.

Support as income stopping: If your pre-approval was based partly on child or spousal support income and those payments stop (ex-spouse loses job, court order changes, support period ends), you may no longer qualify at the same mortgage amount. The lender will recalculate based on your remaining income.

New support obligations: If a court orders you to start paying child or spousal support, that's a new monthly obligation that gets added to your debt ratios. Even if the payments haven't started yet, the obligation exists from the date of the order. This can push your GDS/TDS ratios over the threshold and reduce your borrowing power.

Timing matters: If you're mid-transaction and a family court decision changes your support situation, contact your broker immediately. We may need to adjust the purchase price, increase the down payment, or find a lender with more flexible ratio limits.

CPP survivor benefit: If your deceased spouse contributed to CPP, you may be eligible for a monthly survivor's pension. This is ongoing income that most lenders will accept for qualification purposes. The amount depends on your age and your spouse's CPP contributions.

Employer pension survivor benefit: Many employer pension plans provide ongoing payments to the surviving spouse. Lenders generally accept this as permanent income with a pension confirmation letter.

Life insurance lump sum: While a lump sum isn't monthly income, it can be used as a larger down payment — reducing the mortgage amount needed and making qualification easier. Some lenders will also consider investment income generated from a life insurance payout invested in a portfolio.

If you're recently widowed and need to refinance, renew, or buy, these income sources can make the difference between qualifying and not. Give me a call and we'll map it out together.

Probationary periods are common — typically 3-6 months at a new job. During this time, the employer can terminate without cause, which makes lenders nervous.

Strict lenders (most banks) want the probation period complete before they'll approve. Flexible lenders (available through brokers) will approve during probation if you can show: same industry as your previous job, same or higher salary, a positive employment trajectory (no gaps, lateral or upward move), and strong credit and down payment.

If you just changed careers entirely — say, from oil and gas to tech — some lenders want 6-12 months in the new role before they're comfortable. That's harder to work around but not impossible with the right lender.

Employment income: Letter of employment + recent pay stub. Clean and simple.

Side income / gig work: Two years of T1 General tax returns and Notices of Assessment. Lenders typically average the two years (or use the lower year if there's a big gap). If your side income is less than 2 years old, most lenders won't count it.

Rental income: Lenders use a percentage of rental income (typically 50-80% of gross rent) and add it to your qualifying income. You'll need the lease agreement, T1 tax return showing rental income, and possibly a property appraisal. If the rental property is the one you're buying, many lenders use a rental offset calculation instead.

Investment income / dividends: Two years of T1 returns showing consistent investment income. Lenders want to see stability, not a one-time windfall.