Parental leave and your mortgage: the income that counts isn’t the one you’re receiving

Jade has been on parental leave for four months. Her home has become too small, and a house she has been watching for a long time just came on the market. Her first reaction: “I’ll never get approved, I’m only receiving QPIP benefits.”

We hear this concern often. In many cases, it isn’t founded. But it hides another, more important question that few people ask before signing.

For a salaried person returning to the same job after their leave, most lenders don’t qualify the file on QPIP benefits. They can instead use your regular pre-leave salary, provided there is solid proof that this income will resume.

That proof is almost always a letter from your employer confirming your return to work. Without it, the lender may stick to the benefit amount, and your borrowing capacity drops sharply.

The closer your return, the simpler the file. A return planned within a few months usually raises no issue. An extended leave, or a return that is still far off when you apply, can lead some lenders to ask for more documents or to be more cautious. Policies vary from one institution to another, and that is exactly where a broker makes a difference: one lender declining a file doesn’t represent the whole market.

The leave itself is rarely the real problem. It’s the changes that come with it:

Qualifying on your full salary doesn’t mean having your full salary in your account. During the leave, QPIP benefits replace only part of your income, up to a maximum insurable earnings of $103,000 in 2026.

Take Jade’s salary, $85,000 a year, or about $1,635 gross per week:

The lender sees about $7,080 gross per month. During the 55% portion, Jade receives closer to $3,900 gross per month. Before committing, she needs to check that the new payments, taxes, insurance and baby-related expenses fit within this temporary budget, or that she has a cushion to bridge the gap until her return.

Approval is based on your return income. Your budget is based on your leave income. Both calculations need to work.

Renewing with the same lender is generally simple, since there usually isn’t a full new income review. Switching lenders to get better terms, however, requires a new application, and the return-to-work letter becomes a key document again. If your maturity date is approaching, it’s best to start early so you have time to gather your documents.

Some people are tempted not to mention their leave, especially if they obtained a pre-approval beforehand. That’s a bad idea. The lender verifies employment before funding, and an omitted detail can jeopardize the entire financing. Disclosing the leave from the start lets us target the lenders whose policies fit your situation.

Jade got her return-to-work letter, compared her future payments to her leave budget, then chose a purchase price that left her a comfortable margin until her return. The result wasn’t the most expensive house she could get approved for, but the one she could pay for with peace of mind during the 55% months.

Are you on parental leave, or about to be, with a real estate project taking shape? Let’s talk it through together. As you probably already know, our services are free.