The client
An internationally-trained professional settling in Bridgewater, Nova Scotia, whose employer letter named two figures: a provisional salary being paid now, and a materially higher one that starts only once a Canadian licensing exam is passed. A spouse's steady income rounds out the household.
Applicant's current salary
$3,400/month, being paid now
Provisional, pending the licensing exam
Applicant's anticipated salary
$5,800/month, post-licensing
Not yet earned; not counted by any lender
Spouse's income
$3,000/month
Stable T4 employment
Combined income actually counted
$6,400/month
Provisional salary plus spouse's income only
Other debt
$250/mo car loan
the only item on either bureau file
The problem
A first pre-approval had taken the employer letter's higher, post-licensing figure at face value and priced a $340,000 purchase around it — a natural-looking read of a letter that genuinely names both numbers, but not one any lender's underwriting actually allows. Only income already being paid counts; a conditional raise tied to an exam not yet passed is not bankable, however clearly it's written down.
The file, on the income actually being paid today
- ▸Income counted: $6,400/mo — the provisional salary plus the spouse's income
- ▸GDS at the $340,000 price first discussed: 41.9% — over CMHC's 39% maximum
- ▸The gap traced entirely to counting $5,800/mo that hadn't started being paid yet
Nothing about the applicant's income was speculative in the sense of being unreliable — the job offer was real, the employer was real, and the licensing exam was a normal, expected step for the profession. The problem was purely that the higher figure hadn't happened yet, and a pre-approval built around it was a pre-approval built around a number the file could never actually close on.
The numbers
The mortgage payment itself moved with the purchase price, not with which salary was counted — right-sizing the purchase, rather than trying to argue for the higher income, was what actually closed the gap.
| The insured loan, right-sized | Amount |
|---|---|
| Purchase price (rebuilt from $340,000) | $300,000 |
| Down payment (5%, the minimum at this price) | −$15,000 |
| Base mortgage | $285,000 |
| CMHC premium at 4.0% (90.01–95% LTV band) | +$11,400 |
| Total insured mortgage | $296,400 |
| Ratio check at the qualifying rate | At $340,000 (declined) | At $300,000 (approved) |
|---|---|---|
| Minimum qualifying rate on a 4.89% contract rate | 6.89% | 6.89% |
| Payment at the qualifying rate, 25 years | $2,330/mo | $2,056/mo |
| Income used (provisional salary + spouse) | $6,400/mo | $6,400/mo |
| GDS (payment + $240 tax + $110 heat) ÷ income | 41.9% ✗ | 37.6% ✓ |
| TDS (GDS numerator + $250 car loan) ÷ income | 45.8% ✗ | 41.5% ✓ |
The income used never changed — $6,400/mo throughout, on figures the applicant was actually being paid. Every point of the gap between a declined file and an approved one came from resizing the purchase itself, not from finding a way to count the anticipated $5,800/mo.
The solution
A mortgage broker working under Nova Scotia's licensing framework rebuilt the file around the income that was actually verifiable, rather than the income the employer letter made sound imminent.
First, confirmed directly with the lender's underwriting desk what would and wouldn't count. The answer was unambiguous: current, currently-paid income only. A letter of employment naming a future raise doesn't change that, no matter how specific the letter is about the amount or the trigger.
Second, right-sized the purchase price before resubmitting, rather than resubmitting the same $340,000 file and hoping for a different underwriting read. $300,000 was the level the correctly-counted $6,400/mo could actually support with real room to spare.
Third, flagged the misrepresentation risk directly to the applicant. Submitting a file on anticipated, not-yet-earned income isn't just likely to be declined — treated the wrong way, it can look like income during a probationary or pre-qualification period being misstated as current, which is a much worse outcome than a smaller purchase.
The outcome
Approved insured at $296,400, with GDS at 37.6% and TDS at 41.5% — both inside CMHC's maximums, funded entirely on income the applicant was actually being paid at the time of closing.
Once the applicant eventually passes the licensing exam and the higher salary begins, that income becomes available for a future refinance or renewal decision on its own terms — it was never lost, only not usable yet.
What to take from this file
- 01Only currently-paid income counts, no matter how specifically a future raise is documented. An employer letter naming a conditional future salary doesn't make that salary bankable today.
- 02Right-size the purchase rather than argue for the higher figure. A smaller price on verified income closes faster and more reliably than a larger price built on a number underwriting will always strip out.
- 03A conditional-income error is a misrepresentation risk, not just a declined-file risk. Catching it before resubmission matters more than the dollar gap alone suggests.
- 04The mortgage payment tracks the purchase price, not which income gets counted. Resizing the price, not relitigating the income, is what actually closed this file's gap.
- 05A licensing-exam-conditional salary isn't lost income — it's just not usable yet. Once it starts being paid, it's available for the next mortgage decision on its own terms.
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:
- ▸4.89% contract rate — rates move daily; not a quote.
- ▸the licensing-exam-conditional salary figures — illustrative anonymized figures; employer compensation structures for internationally-trained professionals vary by employer and profession.
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.