What You Need to Know About Mortgages and Parental Leave

Shawn Johnson • August 5, 2026

If the title of this article caught your attention, chances are your family is growing.


Congratulations.


If you’re thinking now is the right time to move into a home that better fits your growing family—but you’re unsure how parental leave affects your ability to qualify for a mortgage—you’re in the right place.


Here’s the good news.


Qualifying for a mortgage while on parental leave is possible when it’s done correctly.


When you work with an independent mortgage professional, lenders can often qualify you based on your return-to-work income, as long as you can provide documentation confirming you have guaranteed employment waiting for you.


A word of caution
If you walk into a bank branch and disclose that you’re currently on parental leave, there’s a chance the bank will only allow you to qualify using your parental leave income.


That can significantly reduce your borrowing power.


Parental leave income is typically limited to 55% of your previous earnings, up to a weekly maximum. Qualifying on that amount alone can restrict your options and impact the type of home you can purchase.


Why lender choice matters
One of the biggest advantages of working with an independent mortgage professional is choice.

You’re not limited to one lender’s rules or products. Some lenders will allow you to qualify using 100% of your confirmed return-to-work income, which can make a meaningful difference in your approval amount and overall options.


What you’ll need to qualify
Most lenders will require an employment letter that includes:

  • Employer name (preferably on company letterhead)
  • Your job title
  • Original start date (to confirm probation has been completed)
  • Confirmed return-to-work date
  • Guaranteed salary upon return


Lenders want reassurance that your income will resume once parental leave ends. You may also be asked to provide income history from the past couple of years, which is standard for most mortgage applications.


One important note
Whether or not you actually return to work after parental leave is entirely your decision. From a mortgage perspective, qualification is based on having a confirmed position available to you at the time of approval.


If you have questions about qualifying for a mortgage while on parental leave—or anything mortgage-related—please connect anytime. I’d be happy to walk you through your options and help you plan with confidence.


Shawn Johnson

Senior Mortgage Specialist

How to Finance Renovations When Buying a Home in Canada

By Shawn Johnson • September 16, 2026
Can’t Find the Right Home After You’re Pre-Approved? There’s Another Option The best place to start any home purchase is with a mortgage pre-approval. It gives you clarity around your budget and lets you shop with confidence. But what happens when you’ve been pre-approved, you know where you want to live—and nothing suitable fits your price range? This is a common challenge, especially for first-time homebuyers. Before buyer fatigue sets in, it may be worth considering a different approach: buying a home that needs work and financing the renovations as part of your mortgage . What Is a Purchase Plus Improvements Mortgage? A purchase plus improvements program allows you to buy a property and include the cost of approved renovations directly in your mortgage. This can be a great solution if: You can’t find a move-in-ready home within budget You’re open to renovations You want to customize the home from the start It opens up more options and can help you get into a location or property that would otherwise be out of reach. How the Process Works While the idea is straightforward, the process itself is structured and requires planning. Here’s a high-level overview: Renovation quotes are required upfront You’ll need detailed quotes for the work you want completed before final mortgage approval. Renovations must add value The lender must be satisfied that the improvements will increase the property’s value accordingly. Funds are reimbursed, not advanced You pay for the renovations initially. Once the work is completed and verified by an appraiser, the lender reimburses you and adds the cost to your mortgage. With the right guidance, this process is very manageable—but it’s important to understand the steps before committing. Is This Program Right for You? Purchase plus improvements isn’t for everyone. Buying a home is already a big undertaking, and adding renovations can increase stress—especially if timelines, budgets, or contractors become challenging. That said, if you’re financially prepared and like the idea of shaping the home to fit your needs, this program can be an excellent way to get more value and flexibility from your purchase. Final Thoughts If you’re struggling to find the right home after being pre-approved, you may not need to lower your expectations—you may just need a different strategy. If you’d like to explore whether a purchase plus improvements mortgage makes sense for you, feel free to connect. I’d be happy to walk you through the process and outline exactly what this option would look like in your situation.

How Your Credit Score Impacts Mortgage Rates and Approval

By Shawn Johnson • September 9, 2026
What Lenders Mean by “Good Credit” When You Apply for a Mortgage Credit is simply the ability to borrow money today based on the trust that you’ll repay it in the future. When you apply for a mortgage, lenders want proof that you’ve consistently honoured that trust by managing credit responsibly. But what does a good credit history actually look like to a lender? The 2 / 2 / 2 Rule Explained If you’re newer to credit or want a simple way to remember minimum mortgage credit requirements, think of the 2 / 2 / 2 rule: 2 active trade lines Established for at least 2 years With a minimum combined limit of $2,000 This is a common baseline lenders use when assessing credit for mortgage financing. What Counts as a Trade Line? A trade line is any account where credit is extended to you, such as: A credit card A line of credit A car loan A personal or installment loan Each trade line reports your payment history to the credit bureau and contributes to your credit score. For a trade line to be considered active , it must: Have been used at least once, and Show activity at least once every three months Why Time Matters Lenders want to see that you’ve managed credit responsibly over time , not just recently. Using two trade lines consistently for at least two years helps demonstrate stable financial habits and reliability. Understanding Credit Limits vs. Balances The credit limit is what matters—not the balance. For example: A $1,000 credit card + a $2,500 line of credit = $3,500 total limit This meets the minimum requirement You do not need to carry a balance to build credit. In fact, the best approach is to: Use your credit regularly Pay it off in full each month (for credit cards) Make all loan payments on time If your lender offers a credit limit increase and you’re managing credit well, it’s often a good idea to accept it. Higher limits—used responsibly—can strengthen your credit profile. A Simple Way to Build Credit Automatically One effective strategy is to: Put recurring bills on your credit card Set up an automatic transfer to pay the balance in full every month Automation helps build positive credit history without requiring constant attention—just be sure to monitor your accounts to ensure everything runs smoothly. What About Credit Scores? Yes, credit scores matter—but they’re not the whole story. If you: Have two active trade lines Established for two years With at least $2,000 in total limits And no missed payments …your credit score will generally take care of itself. That said, it’s still wise to review your credit report occasionally to check for errors or unfamiliar accounts. Final Thoughts If you’re thinking about buying a home in the next couple of years, now is the perfect time to review your credit and make sure you’re on track. Small adjustments today can make a big difference when it’s time to apply for a mortgage. If you’d like help reviewing your credit or understanding how it affects your mortgage options, feel free to connect anytime. I’d be happy to walk through it with you and help you plan with confidence.