The client
A newcomer permanent resident in Guelph, Ontario, trained abroad as an engineer, works under her provincial regulator's provisional registration while completing the requirements for full licensure — earning a real, current, salaried income, and buying her first home in Canada with an employer letter confirming a specific raise once she's fully licensed.
Her current income
$6,100/month
Provisional-registration salary, per T4
Spouse's income
$3,200/month
Canadian employment
Confirmed future raise
$7,800/month
Per employer letter -- effective on full licensure, not yet
Purchase price
$455,000, 10% down
Guelph
Other debt
$290/mo car loan
Unchanged throughout
The problem
The employer's letter confirming her post-licensure raise is genuine, specific, and about as close to certain as a future salary increase gets — a real document from a real employer naming a real dollar figure and a real trigger event. None of that makes it income yet. The lender's policy counts only her current, verified provisional salary; a documented-but-not-yet-effective raise, however credible, is not something a lender is obligated to qualify against.
What counted, and what didn't
- ▸Counted: $6,100/mo, her current provisional salary, verified by T4 and pay stubs
- ▸Not counted: $7,800/mo, the confirmed post-licensure raise -- real, documented, but not yet in effect
- ▸The household's combined qualifying income is $9,300/mo, not the $11,000/mo the raise would eventually produce
The gap between what the letter promises and what the lender will count is not a defect in the file — it's the ordinary, conservative treatment of any income that hasn't started yet, newcomer or not. The only real risk was sizing the purchase against the wrong number.
The numbers
Sizing the file correctly meant qualifying on the household's income as it stands today, with the future raise kept as context rather than as a qualifying figure.
| The insured purchase, qualified on current income | Amount |
|---|---|
| Purchase price | $455,000 |
| Down payment (10%) | $45,500 |
| Base mortgage | $409,500 |
| CMHC premium — 3.10% in the 85.01-90% LTV band | +$12,694 |
| Total insured mortgage | $422,194 |
| Qualifying at the current income | Figure |
|---|---|
| Combined current income (her provisional salary + spouse) | $9,300/mo |
| Minimum qualifying rate on a 4.85% contract rate | 6.85% |
| Payment at the qualifying rate, 25 years | $2,918/mo |
| GDS 36.2% · TDS | 39.3% |
Had the lender counted the confirmed $7,800/mo post-licensure salary instead, combined income would read $11,000/mo — a materially easier file. But that number was never available to qualify against, and sizing the purchase to what $9,300/mo could support meant the file never depended on it in the first place.
The solution
A mortgage agent licensed under Ontario's Mortgage Brokerages, Lenders and Administrators Act sized the purchase to the income that was actually going to count, from the first conversation.
First, confirmed with the lender exactly what would and wouldn't be counted. The provisional salary, verified by T4, counted in full; the future raise, however well-documented, did not.
Second, sized the purchase price to $9,300/mo of combined income, not $11,000/mo. Pre-qualifying against the anticipated raise would have risked a shortfall if her licensing timeline slipped for any reason.
Third, kept the employer's letter on file as supporting context, not as a qualifying document. It strengthened the underwriter's overall comfort with the file without ever being asked to do the work of actual income.
The outcome
The file funded insured at 4.85%, GDS 36.2% and TDS 39.3%, both comfortably inside CMHC's maximums using the current verified income alone. No part of the approval depended on the future raise ever taking effect.
GDS and TDS maximums (39% / 44%) apply because this is an insured purchase; both ratios passed with room to spare on today's income, well before any future raise would even be relevant.
What to take from this file
- 01A confirmed future raise is not qualifying income until it's in effect. No matter how credible the documentation, a lender's policy typically counts only current, verified salary.
- 02Ask the lender directly what will and won't count before sizing the purchase. Guessing which way a lender will treat provisional-registration income risks sizing the file against a number that was never available.
- 03Keep supporting documentation on file even when it isn't qualifying income. An employer letter about a future raise still strengthens an underwriter's overall comfort with the file.
- 04Size the purchase to the income that will actually be counted. A file that only works if a future raise materializes is a file with an unnecessary risk baked into it.
- 05Provisional professional registration is not the same question as newcomer credit history or down payment. This file had none of the usual thin-file or gift-letter complications -- the only variable was which income figure counted.
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:
- ▸4.85% contract rate — rates move daily; not a quote.
- ▸not counting the future licensed salary — each lender sets its own policy on documented-but-not-yet-effective income; some may consider a confirmed near-term raise case by case, but none of them are obligated to.
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.