17 | Getting a Mortgage on Maternity or Parental Leave in Alberta
Getting a Mortgage on Maternity or Parental Leave in Alberta
Can You Get a Mortgage While on Maternity or Parental Leave in Canada?
Yes — getting a mortgage while on maternity or parental leave in Canada is possible. The key is not whether you're on leave, but how the lender assesses your income and whether you have documentation confirming your return to work. Many lenders will use your full pre-leave income if you can provide a letter from your employer confirming your position, salary, and return date.
In This Guide
• How lenders assess income during parental leave
• The document that matters most: the return-to-work letter
• How EI benefits affect your qualifying amount
• Timing your application
• What to do if you're self-employed on parental leave
• FAQ
How Lenders Assess Income During Parental Leave in Canada
Under Canada's Employment Insurance program, standard parental leave benefits are paid at 55% of average insurable earnings, up to a weekly maximum. Extended parental leave (over 12 months) is paid at 33%. For most borrowers, these amounts are significantly lower than their regular employment income.
If a lender only looks at your current EI income, your qualifying amount will be much lower than it would be based on your actual salary. This is the central challenge of getting a mortgage on parental leave.
However, many lenders — particularly when working with a broker who knows which ones to approach — will use your full pre-leave employment income to qualify you, as long as you have documented proof that your leave is temporary and your job is waiting for you. The lender treats your leave as a temporary situation, not a permanent income reduction.
Lenders vary in how they handle this. Some will use 100% of your pre-leave income if your return date is within 12 months. Others are comfortable with a return date up to 18 months out. Some banks are more restrictive and may only use your current EI income, which is exactly why working with a broker — who can identify which lenders take the most favourable approach for your situation — matters so much here.
The Document That Matters Most: The Return-to-Work Letter
The single most important document in a parental leave mortgage application is a letter from your employer confirming:
• Your name and position
• That your job is being held for you
• Your expected return-to-work date
• Your salary or hourly rate upon return
This letter should be on company letterhead and dated within the last 30 days. With this document in hand, you have a strong foundation to use your pre-leave income for qualifying purposes.
Your broker may also request T4s from the past two years and recent pay stubs to support the income history. The goal is to give the lender a complete picture: this person has a real, stable employment history, their leave is temporary, and their income will return.
How EI Benefits Factor In
Even when a lender agrees to use your pre-leave income for qualifying, some will still factor in your current EI benefit amount when assessing your ability to carry the mortgage right now — particularly if your return-to-work date is more than a few months away.
If your employer tops up EI to your full salary during leave, this simplifies things considerably. Employer top-ups are treated as income by most lenders.
If there's a significant gap between your EI income and your mortgage payment, some lenders will want to see that you have sufficient savings or assets to bridge that period. Being able to show three to six months of reserves can help.
When Is the Best Time to Apply?
The simplest approach, if timing allows:
• Before leave starts: Apply for your mortgage while you're still earning your full pre-leave income. You won't need a return-to-work letter, and your qualifying income is clear.
• After returning to work: Once you're back at your regular salary, qualification is straightforward again.
• During leave: Possible — with the right documentation and the right lender. This is where a broker's knowledge of lender policies makes the most practical difference.
What If You're Self-Employed on Parental Leave?
Self-employed individuals on parental leave face an additional layer of complexity. There's no employer to write a return-to-work letter, and parental leave for self-employed borrowers may or may not involve EI (depending on whether they opted into the EI self-employed program).
For self-employed borrowers on leave, lenders will typically look at two years of income history — Notices of Assessment, T1 returns, and business financials — and assess your situation based on the business's track record rather than a return-to-work letter. A broker experienced in self-employed files can be especially valuable in this scenario.
FAQ: Mortgages on Parental Leave in Canada
Q: Do I have to tell my lender I'm pregnant or on parental leave?
You are not legally required to disclose a pregnancy. However, if you're actively on parental leave, your current income will be evident in your pay stubs and bank statements. Being transparent about your situation and having the right documentation typically leads to a better outcome than trying to work around it.
Q: Can I get a mortgage if I'm on extended parental leave (18 months)?
It depends on the lender. Some lenders will use full pre-leave income for return dates up to 18 months away. Others are more conservative. A broker can identify which lenders are most flexible for your specific return timeline.
Q: What if my partner is also on parental leave?
Two incomes on parental leave creates a more complex qualifying picture. If both partners have return-to-work letters and a strong combined employment history, it may still be workable — but the choice of lender becomes even more important. This is a situation where a broker's knowledge of lender policies is particularly valuable.
Q: Will being on parental leave affect my mortgage renewal?
For a straight renewal with the same lender and no change to the loan amount, the stress test does not apply — meaning your current income (even if on leave) is less of a factor. If you're switching lenders at renewal, your income will be assessed.
Ready to take the next step?
If you have questions about your mortgage — whether you're buying, renewing, or just trying to understand your options — I'd love to help. Reach out at 403.866.7854 or jayne@trilogymortgage.ca. No pressure, no jargon. Just a real conversation about what makes sense for your situation.