Short answer
Possibly. Being on maternity or parental leave is not an automatic mortgage decline. The lender will decide whether to use your current leave income, your confirmed return-to-work income, or a more cautious amount after reviewing the leave dates, employer letter, benefit evidence and expected return.
The borrower concern behind the question
You qualified before the leave, but your current deposits are lower and the lender is asking whether the income used in the application still exists.
What the verified guidance says
Service Canada defines EI maternity and parental benefits and publishes their benefit periods and rates. Ontario employment standards provide eligible employees with job-protected pregnancy and parental leave and generally require reinstatement to the same or a comparable position. Neither rule tells a mortgage lender which income figure it must use.
Where lender and insurer policy changes the answer
An employment right to return is not a mortgage-income approval. Some lenders may use confirmed regular salary with a return date; others may use current benefits, require the return to occur before funding, or apply an insurer-specific rule. Employer top-ups, variable pay and a return on reduced hours can change the result.
A practical Ontario example
Illustration only: A buyer normally earns $92,000 and is receiving EI plus an employer top-up. She plans to return full-time two months after closing. One lender may accept the employer-confirmed salary and dates; another may qualify on the lower leave income and reduce the mortgage amount.
What to prepare before the lender reviews the file
Provide the leave start date, expected return date, employer letter, recent pay history, EI statement and top-up terms before making a firm offer. If the first lender will not use the return-to-work income, compare another A lender or insurer policy before assuming the file belongs in alternative lending.
Questions Rajiv would ask first
- Which part of the income is guaranteed, variable, temporary or expected to change?
- What documents independently confirm the amount and how long it should continue?
- Is the mortgage insured or conventional, and which lender or insurer policy applies?
- Will the income or obligation change before closing or during the first mortgage term?
- What A-lender, alternative/B or short-term fallback remains practical if the first calculation fails?
Rajiv’s broker perspective
Income qualification is rarely solved by naming the benefit or employment type. I would first separate the income you receive today from the income a lender can reasonably document and use. Then I would compare the lender’s calculation with the household’s real after-tax budget. An A-lender exception can be appropriate when the story and documents are strong. Alternative/B lending may accept a wider income view in some cases, but the rate, fee and exit plan must earn their cost. MIC or private lending should solve a defined short-term problem, not hide an income gap that has no route back to sustainable financing.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Updates & Rules Centre
Is your income being misunderstood by the lender?
Send Rajiv the income type, employment history, leave or return date, current documents, purchase or renewal deadline and the lender’s concern. He can identify what is missing, compare practical lender approaches and explain the next step in plain language.