New teacher on the grid: when a lender counts your salary

A lender counts a signed permanent or long-term occasional contract with your grid placement as income from the start date, using the board employment letter. Pre-approval can proceed before the first pay. The first pay stub confirms what the letter already stated.

Key takeaways

• A signed contract with your category and step reads as income from the start date, not the first pay.
• The board letter must state status, start date, category, step, annual salary and whether the role is probationary.
• A letter that gives only a daily rate makes a lender do the math or ask for more; an annual figure is cleaner.
• Start of the published grids ran from 48,179 to 61,614 for 2025-26, and the qualifier examples show what those support.
• Work the order: letter, pre-approval, rate hold, then first pay stub to confirm.

The contract counts before the pay does

A lender reads a signed permanent or long-term occasional contract as income from the start date. The document that carries it is the board employment letter. The first pay stub is confirmation, not the trigger. So a September start does not mean waiting until October to be read as a working teacher.

This matters for new and probationary teachers because the gap between signing in the spring and the first pay in the fall is exactly when many people want to shop. The letter closes that gap. It states your placement, and your placement sets your salary.

Across the published board grids for the 2025-26 school year, start of scale ran from 48,179 to 61,614. Where you land inside that range depends on your QECO category and your experience step, which the letter names. A lender uses the exact number in your letter, not the range.

The mechanism: Signed contract plus grid placement equals qualifying income. The letter proves both. The pay stub confirms what the letter already said.

What the letter has to say

The letter does the heavy lifting, so it has to be specific. A vague letter slows the file. Ask the board for one that states each of the following.

Category and step matter because together they set the exact salary. A letter that names both, plus the annual figure, gives a lender a clean number to work from.

Long-term occasional pay is the grid rate prorated by school days. The standard Ontario school year is 194 school days under Ontario Regulation 304, and boards commonly express LTO pay as 1/194 of the annual rate per day. If your letter states only a daily rate, a lender has to reconstruct the annual figure or ask the board for a clearer version. That is extra back and forth. An annual salary on the letter avoids it. Daily occasional rates across the published grids ran from 286 to 294, but a daily rate on its own does not read the same way as a stated annual salary.

• Employment status: permanent, long-term occasional, or occasional.
• Start date.
• QECO category, one of A, A1, A2, A3 or A4.
• Experience step on the grid.
• Annual salary in dollars.
• Whether the position is probationary.

What a starting salary qualifies for

A lender does not qualify you at your contract rate. It uses a qualifying rate: the contract rate plus 2 percentage points, or 5.25%, whichever is higher. That stress test is why the payment used to test you is larger than the payment you would actually make.

Two ceilings then apply. Gross debt service caps housing costs at 39% of income. Total debt service caps all obligations at 44%. Housing costs here include the mortgage payment, property tax and heat.

Two things stand out. First, the number is a maximum, not a target, and it is illustrative. Second, a 500 monthly debt payment pulls the figure down hard at the start of the grid. On the lower salary, that debt cuts the maximum from 190,029 to 143,256. A car payment or a line of credit balance reads straight into the TDS ceiling.

For context on where the grid can go, top of the A4 scale ran from 119,967 to 120,384 across the published boards, supporting maximums in the mid-500,000s in the same model. That is years of steps away from a September start, but it shows the direction as you move up the grid.

• 6% Qualifying rate in these examples (Contract rate of 4% plus 2 points)
• 39% GDS ceiling (Housing costs to income)
• 44% TDS ceiling (All debts to income)

What to do in August and September

Work in order. Each step depends on the one before it, and rushing out of sequence usually means redoing something.

The letter is the piece people underestimate. It is also the piece the board controls, so request it early and check that it names both category and step. If it gives only a daily rate, ask for a version with the annual salary before the file goes anywhere.

Probationary status does not stop a lender from reading a signed permanent contract. It is one detail on the letter, not a barrier on its own. What a lender needs is the placement and the salary, stated clearly.

• Get the board employment letter with status, start date, category, step, annual salary and whether the role is probationary.
• Take that letter into a pre-approval so a lender reads the salary from the start date.
• Set a rate hold if you are shopping, so a rate is reserved while you look.
• Bring the first pay stub once it arrives to confirm what the letter already stated.

Order matters: Letter first, then pre-approval, then rate hold, then first pay stub. A clean letter is what lets a September start be read before the money arrives.

Sources and dates

Figures in this guide come from the sources below. Each entry shows the date the source published it, or the date it was accessed when the source does not state one. After the review date, treat any number as a starting point and check the source.

• OECTA York Catholic unit collective agreement 2022-2026 (Art. 6.01) (as of 2025-26)
• OSSTF District 25 (OCDSB) collective agreement 2022-2026 (as of 2025-26)
• ETFO Durham teachers salary grid 2022-2026 (as of 2025-26)
• ETFO York Region local collective agreement 2022-2026 (as of 2025-26)
• OSSTF Toronto (TTBU) collective agreement 2022-2026 (as of 2025-26)
• OSSTF District 16 (YRDSB) collective agreement 2022-2026 (as of 2025-26)
• Ontario Regulation 304, School Year Calendar, Professional Activity Days (Education Act) (as of 2026-08-26)
• OSFI, minimum qualifying rate for uninsured mortgages (as of 2026-01-29)
• CMHC, mortgage loan insurance for homeownership: debt service ratios (as of 2026-08-26)

Common questions