Permanent teacher mortgage strategy
A permanent contract on the grid is the cleanest file a lender sees. Your full base salary counts from day one, and the fact that your pay is spread over 12 months (or paused in July and August) does not change the number a lender uses.
Your annual base salary is the qualifying number. Summer being unpaid does not reduce it.
What actually happens to your income
Lenders qualify on your gross annual base salary, taken from your board employment or salary letter.
Whether your pay is disbursed over 10 or 12 months is irrelevant to qualifying income. The annual figure is the same either way.
Pension (OTPP) deductions come off your net pay, but lenders qualify on gross income, so they do not reduce your debt-service ratios.
Grid placement (category and step) lets us forecast your contractual raises, which can help on a stretch file.
Your documents
- Board employment or salary letter stating position, category and step, base salary, and start date
- Two recent pay stubs
- Most recent T4 and Notice of Assessment
- Down-payment proof, government ID, and a void cheque
The approach
- We use your full annual base salary, not a watered-down monthly figure.
- We make sure your employment letter says the right things up front, so the file does not stall.
- We position grid raises where a lender will give you credit for them.
Some loan officers get confused that "summer is unpaid" and try to reduce your income. For a permanent teacher that is simply wrong. The annual base salary is the number.
Permanent / full-time teacher: the questions we hear
Does a permanent teacher need two years of history to qualify?+
No. A permanent teacher qualifies on annual base salary from a board employment letter, generally from the first full pay cycle. The two-year history requirement applies to variable income such as occasional and LTO work.
Does summer being unpaid lower a permanent teacher's qualifying income?+
No. Lenders use your annual base salary whether it is disbursed over 10 months or 12. The pay schedule does not change the annual figure.
Do my pension (OTPP) deductions hurt my mortgage approval?+
No. Lenders qualify you on gross income, before deductions. Your pension contribution does not reduce the income figure used to assess you.
See what you actually qualify for
A free, honest review of your situation as a permanent / full-time teacher. No pitch.