Key takeaways
- →Most lenders qualify a borrower on maternity or parental leave using their regular return-to-work salary, not the lower EI benefit they're currently receiving — this is common industry practice, not a universal rule every lender applies identically.
- →The load-bearing document is a written return-to-work confirmation from the employer, stating the position, salary, and expected return date.
- →EI maternity and parental benefits are a percentage of average insurable weekly earnings, up to a maximum that's indexed and changes every January — always confirm the current figures directly rather than relying on a number from a prior year.
- →The relationship between the return date and the mortgage closing date can affect how comfortable a specific lender is with the file, so it's worth flagging both dates clearly upfront.
A borrower on maternity or parental leave is a routine file, not an unusual one — but it only goes smoothly when the income being qualified is understood correctly from the start. The instinct to look at a recent pay stub or bank deposit and see the EI benefit amount, then treat that as “current income,” is the most common way this file type goes sideways.
Here's why most lenders look past the EI benefit to the income the borrower is returning to, what the employer's confirmation letter needs to say, and how the EI benefit itself actually works.
01 · Why does a leave create a qualifying income problem in the first place?
Because the income showing up in the borrower's bank account right now — the Employment Insurance maternity or parental benefit — is a fraction of their regular pay, and it's explicitly temporary. Qualifying a mortgage on a benefit that's scheduled to end, at a lower amount than the borrower's normal income, would misrepresent their actual long-term capacity to carry the mortgage.
The employment relationship itself, however, hasn't ended — the borrower has a job to return to, at their regular salary, on a known or reasonably estimable date. That distinction is what most lenders' policies are built around.
02 · Why do most lenders qualify on the return-to-work income instead of the EI benefit?
Because the return-to-work salary reflects the borrower's actual, ongoing earning capacity, while the EI benefit reflects a temporary, time-limited reduction. This is standard, widespread industry practice across Canadian lenders, though the exact policy language and documentation requirements vary from lender to lender — it isn't a single codified rule with identical wording everywhere, so it's worth confirming the specific lender's requirements on a given file rather than assuming.
Some lenders will want the return date to fall within a defined window relative to closing; others are more flexible provided the employer confirmation is solid. Either way, the qualifying number itself is almost always the regular salary, not the EI amount.
03 · What has to be in the employer's return-to-work confirmation?
A usable confirmation letter states, at minimum: the borrower's position and regular salary or hourly rate, confirmation that the position is being held open, and the expected or confirmed return-to-work date. Some lenders also want confirmation of guaranteed hours if the role is hourly rather than salaried.
A vague letter — confirming only that the borrower is “currently on leave” without stating the salary or a return date — usually generates a condition asking for exactly this detail, so it's worth requesting the complete version from the employer the first time rather than in a second round.
Leave income, handled correctly
Return-to-work income, confirmed the way lenders need it.
Treadstone's fulfillment team gets the employer confirmation letter right the first time — salary, position held, return date — so a leave file doesn't stall on a preventable condition.
04 · How does the EI maternity and parental benefit itself actually work?
Employment Insurance maternity benefits, and standard parental benefits, replace a percentage of a claimant's average insurable weekly earnings, up to a maximum insurable earnings ceiling — both the percentage-based structure and the dollar ceiling are set by the federal government and adjusted annually. Extended parental benefits pay a lower percentage over a longer benefit period than the standard option.
Because the maximum insurable earnings and the resulting weekly benefit cap change every January, don't rely on a prior year's dollar figures when reviewing a file — confirm the current year's numbers directly with the borrower's Service Canada benefit statement or the current federal EI program details before using any specific figure in a calculation.
05 · Does the timing of the return date relative to closing matter?
It can, depending on the lender's specific policy — some are comfortable qualifying on return-to-work income regardless of how far off the return date is, provided the employer confirmation is strong; others prefer the return date to fall within a defined window before or around closing.
Flagging both dates — expected return-to-work date and target closing date — clearly in the submission, rather than leaving the underwriter to calculate the gap themselves, avoids an easily preventable round of conditions.
Frequently asked questions
This article is general information to help you scale — not a substitute for tailored advice on your specific business, licensing, or compliance obligations. All figures are illustrative examples for planning purposes; actual costs vary by province, market, and brokerage.