The client
A newcomer household in Cornwall bought a $335,000 home at 5% down, one applicant newly employed under a contract guaranteeing a 20-hour-per-week floor.
Purchase price
$335,000, Cornwall
5% down, insured
Contract's guaranteed floor
20 hrs/week
$2,250/month if counted alone
Documented actual hours
Consistently higher
$4,280/month per the pay-stub average
Co-applicant income
$3,200/month
Unaffected by the hours question
Other debt
$190/mo car loan
The problem
A new-to-Canada employment contract that guarantees a minimum hours floor is a real, enforceable term -- but it is a floor, not a ceiling, and pay stubs since starting showed the newcomer had been scheduled well above it every week. The first lender's underwriter would count only the contractual guarantee, treating the documented actual hours as unverified until proven otherwise for years, not months.
Two numbers, one job
- ▸The employment contract itself guarantees a 20-hour-per-week floor -- a real, contractual minimum
- ▸Pay stubs since the job started showed a consistently higher actual-hours average, week after week
- ▸One lender's policy would count only the guarantee; the actual, documented pattern was treated as noise rather than evidence
The contract's guarantee was real. So were the pay stubs showing the guarantee was not what the newcomer was actually being paid.
The numbers
Qualifying on the guaranteed floor alone was never going to clear CMHC's ceilings; the actual-hours average is what the file needed to stand on.
| The insured purchase | Amount |
|---|---|
| Base mortgage (95% of purchase price) | $318,250 |
| CMHC premium (4.00% at 95% LTV) | +$12,730 |
| Total insured mortgage | $330,980 |
| Qualifying scenario | GDS | TDS |
|---|---|---|
| Guaranteed 20-hr/week floor + co-applicant income ($5,450/mo) | 49.0% | 52.4% |
| Documented actual-hours average + co-applicant income ($7,480/mo) | 35.7% | 38.2% |
The payment itself, at $2,308/mo, never changed. Only which of the two income figures a lender was willing to count against GDS did -- and that gap is what a first mortgage agent's own file review, not a fresh appraisal or a bigger down payment, actually closed, in a market where first-time-homebuyer data shows newcomers make up a meaningful share of the buyers this kind of hours question actually affects.
The solution
A mortgage agent licensed under Ontario's Mortgage Brokerages, Lenders and Administrators Act treated the guaranteed-hours floor and the documented actual-hours pattern as two different questions, then built the file around the one the pay stubs could actually prove, the same way using both jobs to qualify works for a borrower combining part-time and full-time income.
First, assembled enough pay stubs to show a stable actual-hours pattern since the job started -- not one or two anomalous weeks, but a consistent run since day one.
Second, obtained a short letter from the employer confirming the actual scheduling pattern was expected to continue, distinguishing it from a temporary surge in hours.
Third, moved the file to a lender whose policy counts a sufficiently long, consistent actual-hours record rather than the contract's stated guaranteed minimum alone.
The outcome
The purchase funded insured at 35.7% GDS and 38.2% TDS, on the documented actual-hours income the guaranteed floor alone would never have supported.
Both ratios sit comfortably inside CMHC's 39% GDS and 44% TDS maximums; on the guaranteed floor alone, GDS of 49.0% would have been well over the ceiling.
What to take from this file
- 01A contract's guaranteed-hours floor is a minimum, not a description of actual pay. Pay stubs, not the contract's own wording, are what prove what a newcomer is actually earning.
- 02Each lender sets its own policy for how many months of actual-hours documentation it will accept over a stated contractual guarantee. There is no published rule -- ask before assuming a low guaranteed floor caps the file.
- 03A consistent actual-hours pattern since day one is stronger evidence than a single strong month. Build the pay-stub record from the start, not just at the point of application.
- 04Distinguish a genuine scheduling pattern from a temporary hours surge. An employer letter confirming the pattern is expected to continue is what turns pay stubs into qualifying income.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸4.95% contract rate — rates move daily; not a quote.
- ▸the first lender's guaranteed-hours-only income read — each lender sets its own policy for how many months of actual-hours pay stubs it will accept over a contract's stated guaranteed minimum; there is no published rule.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.