Your pension and your mortgage

Pension (OTPP) deductions come off your net pay, but lenders qualify on gross income, so they do not reduce your debt-service ratios. A defined-benefit pension is a long-term stability positive. It is not a liquid asset you can use for a down payment.

Teachers see a meaningful pension deduction on every cheque, so it is natural to worry it shrinks what you can borrow. It does not work that way.

How the contribution works

Members contribute 10.4% of salary up to the annual CPP earnings limit and 12% above it, matched by the Ontario government and participating employers, as OTPP publishes. The CPP limit changes each year: $71,300 in 2025 and $74,600 in 2026.

Why it does not hurt qualification

• Lenders qualify on gross income. Pension deductions come off net pay, so they do not change the gross figure used for your ratios.
• A defined-benefit pension is a strong long-term stability signal for a lender.
• It is not a liquid asset. Do not plan to use the pension itself for a down payment. Use FHSA and RRSP (Home Buyers' Plan) savings for that.

Sources and dates

Figures in this guide come from the sources below. Each entry shows the date the source states, or the date it was read when the source gives none. After the review date, treat any number as a starting point and check the source.

• Ontario Teachers' Pension Plan, defined benefit pensions (contribution rates and the CPP limit) (accessed 2026-08-26)
• Canada Revenue Agency, CPP contribution rates, maximums and exemptions (accessed 2026-08-26)

Common questions