On Parental Leave With a Return Date: Full Salary or Leave Income?
Many lenders will use your full grid salary, not your leave income, when a board letter confirms your position, category and step, your annual salary, and a set return date. The letter is what makes the difference; without a confirmed return, some lenders fall back to the actual income you receive during the leave.
Key takeaways
- A board letter that states your position, category, step, annual salary, leave dates and return date lets many lenders qualify you on the full grid salary.
- With no confirmed return date, or a return that is far out, a lender may use your leave income instead, which lowers the number.
- Qualifying uses the contract rate plus 2 percentage points, or 5.25%, whichever is higher.
- Lenders apply a 39% GDS ceiling and a 44% TDS ceiling to the income they accept.
- Apply with the letter in hand and be ready to close around the return date if the lender asks.
The return-to-work letter is the whole file
Many lenders will use your full grid salary when a board letter confirms the position and the return date. The leave income you receive right now does not have to be the number the file is built on.
The reason is simple. A lender is trying to answer one question: what will you be paid when the mortgage payments run for years, not what you are paid this month. A permanent position with a set return date tells the lender the grid salary resumes on a known day. That is the income the file uses.
What changes the answer is the strength of the return date. When the letter states a confirmed date and the position is held for you, the full salary is on the table. When the return date is not confirmed, or it sits far out with no fixed day, a lender has less to stand on. In that case some lenders fall back to the income you actually receive during the leave, which is lower and produces a smaller mortgage.
The mechanism: Confirmed position plus confirmed return date equals full grid salary at many lenders. Missing or vague return date equals leave income at some lenders. The letter is the lever.
What the board letter must say
The board letter has to do the work of a full employment letter and settle the leave on top. If any of these five items is missing, expect the lender to ask for a revised copy before it accepts the full salary.
The category and step matter because they fix the number. Across the published board grids for the 2025-26 school year, the categories run A, A1, A2, A3 and A4. Start of grid ranges from $48,179 to $61,614 depending on the board, and top of grid A4 ranges from $119,967 to $120,384. The letter tells the lender exactly where you sit, so there is no guessing.
See The teacher employment letter and Documents teachers need for a mortgage for the full list a lender wants alongside the board letter.
- Your position and whether it is permanent.
- Your QECO category and step, which set the exact salary on the grid.
- Your annual salary, stated as a figure.
- Your leave start and end dates.
- Your confirmed return-to-work date.
What the full salary qualifies for
Once the lender accepts the full grid salary, the salary drives the qualifying math the same way it would if you were teaching this week. Qualifying uses the contract rate plus 2 percentage points, or 5.25%, whichever is higher. The lender then applies a 39% GDS ceiling and a 44% TDS ceiling to that income.
The examples below use a 4% contract rate, so the qualifying rate is 6%, over a 25 year amortization, with $250 a month for property tax and $100 a month for heat. They are illustrative maximums from the site affordability model. A lender uses the exact grid salary in the letter and your actual debts.
Two things stand out. A $500 monthly debt cuts the number sharply at the start of grid, where the payment eats a large share of a smaller income. At top of grid A4 the same $500 barely moves the result, because the income clears the ratios with room to spare. This is why a lender asks for the exact salary and your real payments before quoting a figure.
| Grid salary example | Annual income | Max mortgage, no other debts | Max mortgage with $500 monthly debt |
|---|---|---|---|
| Start of grid, lowest published board | $48,179 | $190,029 | $143,256 |
| Start of grid, highest published board | $61,614 | $258,274 | $220,251 |
| Top of grid A4, lowest published board | $119,967 | $554,688 | $554,666 |
| Top of grid A4, highest published board | $120,384 | $556,806 | $556,806 |
Read it this way: A qualifying payment scales with what you owe. A debt you have paid off counts as zero. Clearing a balance before you apply can lift the number more than any single line in the letter.
Timing a purchase around the leave
Apply with the board letter in hand, and be ready to close around the return date if the lender asks. Do not guess at what a lender will accept, and do not assume every lender reads a leave the same way.
The order matters. A confirmed return date is worth more when it is close, and a lender is more comfortable when the closing sits near the day the grid salary resumes. If the return is far out, a lender may still lend, but on the leave income until the salary restarts.
For the wider picture on offers, closings and deposits during a leave, see Buying while on maternity or parental leave.
- Get the board letter first, with all five items from section two, before you make an offer.
- Have the letter reviewed against the lender's leave rules, because some accept the full salary on a confirmed return and some do not.
- If a lender wants the closing near your return date, line up the closing to sit on or after that day.
- Keep proof of the position and the return date current, since a stale letter can send the file back to leave income.
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)
- 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
Will a lender use my full salary or my parental leave income?+
Many lenders use your full grid salary when a board letter confirms your permanent position, your category and step, your annual salary, your leave dates and a set return date. Without a confirmed return date, some lenders use the leave income you actually receive, which qualifies you for less.
What has to be in the board letter for a lender to accept my full salary?+
Your position and whether it is permanent, your QECO category and step, your annual salary as a figure, your leave start and end dates, and your confirmed return-to-work date. If any of these is missing, expect the lender to ask for a revised letter.
How much does a $500 monthly debt change what I qualify for on leave?+
It depends where you sit on the grid. At the start of grid, lowest published board, a $500 monthly debt drops the illustrative maximum from $190,029 to $143,256. At top of grid A4 the same debt barely moves the result, since the income clears the 39% GDS and 44% TDS ceilings with room to spare.
Do I have to wait until I am back at work to buy?+
Not always. With a confirmed return date in the board letter, many lenders will proceed on the full salary, though some may want the closing to sit on or near your return date. Apply with the letter first and confirm the lender's leave rules before you make an offer.
What qualifying rate does a lender use while I am on leave?+
The same rule that applies to any teacher file: the contract rate plus 2 percentage points, or 5.25%, whichever is higher. In the site examples, a 4% contract rate gives a 6% qualifying rate over a 25 year amortization.
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