Buying a Home Before Maternity Leave? The Approval Isn’t the Problem
Mortgage decisions are not always a walk in the park when it comes to life and family dynamic changes…
Buying a home around maternity or parental leave can feel a little confusing, because there are really two different questions happening at the same time.
The first question is whether you can qualify for the mortgage.
The second question is whether the home still works while one of you is on leave and your monthly cash flow changes.
Although they sound really similar…they really are not the same question. And the reasoning is kind of simple. A lender may be able to use both incomes to approve the mortgage (as if the parent on leave was fully earning their income at that time), but that does not automatically mean the budget will feel comfortable while one parent is receiving EI, waiting on a top-up, or adjusting to new baby expenses.
So if you are planning to buy a home and maternity leave is part of the next chapter, here’s my guide to answer all your burning questions about maternity leave - and how I would think about it.
Can You Still Qualify for a Mortgage While on Maternity Leave?
In many cases, yes.
If you are employed and currently on maternity or parental leave, we may still be able to use your regular employment income to qualify for the mortgage. The key is documentation.
Usually, the lender will want a job letter confirming your position, income, and return-to-work date. If that letter supports that you are returning to work, the lender will oftentimes be able to use your regular income rather than only looking at what you are receiving while on leave.
For many people, this is similar to how they would qualify if they were not on maternity leave; really, the only difference is that return to work date.
Where it can get a little more nuanced is if your income includes things like bonus, overtime, commission, or variable income. In those cases, the lender may look at a two-year average to determine what income can be used and to potentially maximize your qualification income.
If you are employed and on leave, lenders may still be able to use your regular employment income. The right approach usually depends on how your income is earned and what the documents show.
Step 1: Do you have a job letter?
If your job letter confirms your salary, position, and return-to-work date, we may be able to use that income to qualify.
Step 2: Do you earn overtime, bonuses, or commission?
If no:
We would usually look at your job letter and paystub to support your regular employment income.
If yes:
We may be able to use a two-year average from your T4 income, especially if your overtime, bonus, or commission income is consistent.
Step 3: Was your most recent year higher than the year before?
If yes:
A two-year average may make sense for qualification.
If no:
We may need to explain the drop and determine whether it makes more sense to use the lower recent-year income or the job letter income instead.
Broker note:
Sometimes the job letter income is actually the better number to present, especially if your most recent T4 was lower because you went on leave early and your normal annual income is not properly reflected.
Sometimes reviewing with a licensed mortgage broker can help you figure out what’s the best foot forward with lenders - and they will present it as so.
What If You Are Self-Employed?
If you are self-employed, the maternity leave conversation is a little different because your income is usually based on your tax filings. In most cases, lenders are looking at a two-year average of your income from your T1s. So if you are applying for a mortgage in 2026, the lender would typically be reviewing your 2024 and 2025 income. Again, the most recent year matters. Similar to if you were employed regularly.
If your 2025 income was lower than your 2024 income, the lender would not simply average the two years and move on. They would likely use the lower income from the most recent year, or they may want to understand why the income changed.
Self-Employed Income
What we usually need to use your self-employed income
If you are self-employed, lenders are usually looking at your filed income from the two most recent tax years. So the income needs to be filed, confirmed, and supported by the right documents.
- ✓ Your two most recent years of T1 Generals
- ✓ Your two most recent Notices of Assessment
- ✓ An explanation if the most recent year is lower than the year before
Example: If you are applying in 2026, lenders will typically review your 2024 and 2025 income. If 2025 is lower than 2024, that lower year may affect what income can be used to qualify.
This is why timing is important, especially for self-employed borrowers. If your income is changing, your family is growing, and you are trying to buy a home at the same time, you want to look at the mortgage numbers before you are deep into the house search. To save you heartbreak, do this before you have already fallen in love with the home.
The Bigger Question: Can You Carry the Home During the Leave?
This is the part that often gets missed, and some people don’t actually consider this, believe it or not. Some version of “Well, the lender approved me, so since they trust we can pay for it, they likely know what they’re doing, and they think we should be able to afford it, all good!” is often uttered or thought of when getting an approval. A lot of people just focus on whether the lender will approve them. And true, that makes sense… You need the approval after all.
But let’s be completely frank, the lender’s approval is not your budget. The lender may be able to use both incomes on paper, but while one parent is on leave, the money coming into the household may look very different. They treat maternity leave as temporary with a “Return to normal” date, and trust that you’ll figure it out even if things are tight.
That is where the real planning starts - for yourself and your family. Don’t just expect that all is fine; figure it out. And if you’re here reading this, I expect you are someone who wants to plan and know down to brass tacks what this all looks like.. and for that, I applaud you!
So, essentially - You need to understand what income will actually be coming in, what expenses will change, and whether you need savings to bridge the gap.
1) Start With EI
If the parent going on leave qualifies for EI maternity or parental benefits, the amount they receive will depend on their income, up to a maximum.
EI Maternity & Parental Leave Amounts
The leave length you choose can change your monthly cash flow
EI is based on a percentage of your average insurable weekly earnings, but only up to a maximum amount. So don’t just assume it will replace the same percentage of your full salary.
Standard parental benefits / 12-month leave
The basic rate is 55% of average insurable weekly earnings, up to a maximum amount. In 2026, the maximum is $729 per week.
Extended parental benefits / 18-month leave
The basic rate is 33% of average insurable weekly earnings, up to a maximum amount. In 2026, the maximum is $437 per week.
The key point: EI has a ceiling. If your income is above the maximum insurable earnings, your benefit does not keep increasing with your salary.
I like to think of it as the Government setting aside a “set” max amount per maternity leave, and that they spread that same amount either way - over 12 months, or 18 months.
If you decide to return to work early, please also note that you’re forfeiting the rest of your maternity leave EI.
You can find the Government of Canada’s explanation here.
The important thing to understand is that EI is not always 55% of your full salary. There is a cap. Once you hit the cap, it doesn’t matter if you make 70k a year, or 400k a year. The payout is the exact same if you’ve hit that cap.
So simply put - if your income is above the maximum insurable earnings, your EI benefit does not keep increasing with your salary.
That is why I would not guess at this number. Figure out what you are actually likely to receive and use that number in your budget.
2) Check Your Employer Top-Up
The next thing to look at is whether your employer provides a maternity or parental leave top-up. This can make a huge difference, but it is also an area where people sometimes assume too much.
Some employers offer a very strong top-up. Some offer a partial top-up for a limited number of weeks. Some provide just enough to help with benefit contributions, pension contributions, or RRSP contributions. Some offer nothing at all (sadly, this is the most common option in my experience).
And even when there is a top-up, it may not work the way people assume.
It may only last for part of the leave. You may need to apply for it. You may need to continue paying into benefits or other workplace plans. Your actual take-home pay may look different than what you expected.
So before you build the budget, check your employee handbook, internal HR site, benefits portal, or speak directly with HR.
Employer Top-Up Checklist
Before you build your mat leave budget, ask HR these questions:
A top-up can make a big difference, but don’t assume it works the way you think it does. Get the details before you rely on that income.
- ✓ How much will you receive?
- ✓ How long will it last?
- ✓ Do you need to opt in?
- ✓ Will benefit payments continue?
- ✓ Will pension or RRSP contributions continue?
- ✓ What will your actual take-home income look like?
This is one of those steps that is not exciting, but it is incredibly useful. It gives you the real number instead of the assumed number.
3) Don’t Forget the Canada Child Benefit
Once your child is born, you may also start receiving the Canada Child Benefit, often called the CCB. This can help, but it is important to estimate it properly because the CCB is not the same for every family. It depends on your adjusted family net income, the number of children you have, and the age of the child (or children).
For the July 2026 to June 2027 benefit year, the maximum for a child under 6 is $8,157 per year, or $679.75 per month. But that is the maximum. Many families will receive less than that. For example, a family with one child under 6 and adjusted family net income around $100,000 would receive closer to $375 per month. That is still helpful, but it is very different from assuming you will receive the maximum amount.
Note: Sometimes, it can take a couple months for this benefit to start to come in. So don’t expect it right away.
The other thing to remember is that CCB is based on your previous year’s income. So if you are on maternity leave from July 2026 to June 2027, your CCB may be based on your 2025 household income (reading between the lines - when both parents were employed FT), even though your current income during leave may be lower. So yes, include the Canada Child Benefit in your planning. Just do not use the maximum unless you actually qualify for the maximum.
Now Look at the Expense Side
Once you understand the income side, you need to look at what the household will actually cost during the leave. This is where maternity leave becomes more than just an income conversation; It is a cash flow conversation.
Your income may go down, but your regular expenses do not automatically go down with it. You may still have the mortgage payment, property taxes, utilities, insurance, groceries, car payments, student loans, credit cards, and everything else that was already part of your life. Then you add a baby. And while babies do not have to be wildly expensive, they are not free either.
You may need diapers, wipes, formula, clothes, medicine, bottles, a pump, baby gear, and a bunch of small things you did not know existed until you suddenly need them. You may find ways to lower monthly expenses, like you may opt for reusable diapers and wipes, secondhand clothes, etc - but there’s still an associated cost to all.
There are also the bigger setup costs: crib, stroller, car seat, monitor, furniture, baby gates, and whatever else you decide is important. Some people spend a lot. Some people keep it very simple. Either can work. But whatever your plan is, make sure the money is actually accounted for.
When you are running the mat leave budget, do not just reduce the income, add a real baby expense line.
A Simple Parental Leave Budget Template
Once you have the numbers, I would put them into a simple monthly cash flow template. For your convenience, I’ve created a template for you to try to visualize what things look like month over month in this era of your life.
You do not need to make this complicated. You are just trying to answer one question:
During the leave, are we short each month, breaking even, or still comfortable?
If the final number is positive, great. That means the home may still fit during the leave. If the final number is negative, that does not automatically mean you cannot buy the home. It just means you need to know how much savings you need to bridge the gap.
The key is not pretending the shortfall does not exist. The key is knowing the number before you buy and planning for it
Think Past the Leave and Look at Daycare
The next piece is daycare. This is the part many people forget because they are focused on surviving the maternity leave itself.
But sometimes the budget does not get easier right when the leave ends. One income may come back, but daycare may show up at the same time.
So before you buy the house, take a few minutes to look up daycare costs in your area, both for subsidized and non-subsidized through the government. Then look into availability, because cost is only one part of the problem.
In many parts of Canada, daycare waitlists can be difficult. It may be worth getting your name on lists early, possibly even before the baby is born. I know personally I’ve heard of clients putting their baby on the waiting list, and start calling/interviewing basically when they’re 3 months old. I know even my wife put our firstborn on the list and started calling at 3 months, and was actually told there may be a good chance there wouldn’t be a spot available for her return-to-work date - so we had to plan around that date and find supports elsewhere to bridge the gap. For our second, we let the daycare know where their sibling attended, while my spouse was still pregnant, to secure the spot.
Long and short of it is - Because if daycare is not available when you need it, the plan can change quickly. One parent may need to stay home longer. You may need to look at private daycare or nannies for a short while until a spot becomes available. One parent may need to go back part-time. You may need family support.
Or you may end up paying more for the option that actually has space (usually in non-subsidized daycares).
Quick Daycare Check
- What does daycare cost?
- When will you need it?
- When can you actually get a spot?
If you do not know those three things, you may not really know what the post-leave budget looks like yet. And it’s good to think about it.
Make Sure the Home Fits the Life You Are Building
The last thing I would think about is whether the home fits the family you are becoming, not just the family you are today. A home that works with a newborn does not always work with a toddler. And a home that works for one child may not work if you are planning for more.
Future Home Fit Check
Before you stretch to buy the home, think a few years ahead
The home that works with a newborn may not be the home that works when your family life changes. Before you commit, ask:
- ✓ Is there enough space?
- ✓ Does the layout work?
- ✓ Is there enough storage?
- ✓ Is the commute still reasonable?
- ✓ Are you close enough to daycare, family, work, or the things that will make daily life easier?
- ✓ Would the home still make sense three to five years from now?
Because the last thing you want is to stretch to buy the home, survive maternity leave, and then realize two years later that the house does not actually fit your family. At that point, moving can get expensive. You may be dealing with realtor fees, legal fees, land transfer tax, mortgage penalties, moving costs, and the general stress of starting over.
So yes, the payment matters. Just like the approval matters. And of course the mat leave budget matters.
But the fit of the home matters too.
Final Thoughts
If you are buying a home while planning for maternity or parental leave, do not only ask whether the lender will approve you.
That is only one part of the conversation.
A lender may be able to use both incomes to qualify you for the mortgage, but you still have to live through the leave.
Final Takeaway
Before you buy, make sure you know the real numbers
So take the time to figure out what this season will actually look like for your household:
- ✓ What will EI pay?
- ✓ Does your employer offer a top-up?
- ✓ How much Canada Child Benefit should you expect?
- ✓ What new expenses will you have?
- ✓ How much savings do you need if there is a shortfall?
- ✓ What will daycare cost after the leave?
- ✓ Does the home still fit your life a few years from now?
Because the goal is not just to get approved for the mortgage. The goal is to buy a home that still works when your life changes.
If you need a hand assessing this or would like a second set of eyes on what like looks like all costs considered, we’re always here to discuss what that looks like and what fits your lifestyle needs, budget and life stage. Feel free to book a time for a free, no pressure assessment with me to go over everything together
All the best,
Jeff Dinsmore
Mortgage Broker
FSRA #10315
TMG - The Mortgage Group
VeloMortgage.ca