Employment Status | How it Impacts Your Mortgage Application

Diane Buchanan • February 26, 2019

Chances are, if you’re applying for a mortgage, you feel confident about the state of your current employment, or your ability to find a similar position if you needed to. However, your actual employment status probably means more to the lender than you might think. You see, to a lender, your employment status is a strong indicator of your employer’s commitment to your continued employment.

So, regardless how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways employment status can be looked at.

Permanent Employment. This is the gold star, if your employer has made you a permanent employee, it means that your position is as secure as any position can be. When a lender see’s permanent status (passed probation), it gives them the confidence that you’re valuable to the company and that your income can be relied on.

Probationary Period. If you’ve only been employed with a company for a short period of time, you’re going to have to prove that you’ve passed any probationary period. Although most probationary periods are typically 3-6 months, they can be longer. The lender will want to make sure that you’re not under a probationary period because an employer can terminate your employment without any cause while you’re under probation. There isn’t a lot of confidence for the lender if you haven’t made it through your initial evaluation.

Now, it’s not really the length of time with the lender that is being scrutinized here, it’s the status of your probation. So if you’ve only been with a company for 1 month, but you’ve been working with them as a contractor for a few years, and they’re willing to waive the probationary period based on a previous relationship, that should give the lender the confidence they need. You’ll just need to get that documented.

Parental Leave.  If you’re currently on, planning to be on, or just about to be done a parental leave, regardless of the income you’re currently collecting, as long as you have an employment letter that outlines your guaranteed return to work position (and date), you can use your return to work income to qualify on your mortgage application. It’s not the parental leave that the lender has issues with, it’s the ability you have to return to the position you left.

Term Contracts.  This is hands down the most ambiguous and misunderstood employment status as it’s usually well qualified and educated individuals who are working excellent jobs with no documented proof of future employment. A term contract specifies that you will be paid to do a certain job from a start date to an end date. This is not a lot for a lender to go on when evaluating your long term ability to repay your mortgage. The real conflict here is that although most term contracts get renewed or extended, your employer is not making any guarantees.

So in order to qualify income on a term contract, there are several different ways lenders look at it. The best would be to establish the income on at least a 2 year period This is where the 2 year NOA or T4s come into play, the lender would simply take a 2 year average and use that. However sometimes lenders also like to see that the contract has been renewed at least once before considering it as income towards your mortgage application.

If you’ve recently changed jobs, or are thinking about making a career change, and qualifying for a mortgage is on the horizon, or if you have any questions at all, please don’t hesitate to contact me anytime. We can work through the details together and make sure you have a plan in place.

DIANE BUCHANAN
 Mortgage Broker

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New to Credit? Let’s Build a Solid Foundation

By Diane Buchanan • December 17, 2025
Starting from Scratch: How to Build Credit the Smart Way If you're just beginning your personal finance journey and wondering how to build credit from the ground up, you're not alone. Many people find themselves stuck in the classic credit paradox: you need credit to build a credit history, but you can’t get credit without already having one. So, how do you break in? Let’s walk through the basics—step by step. Credit Building Isn’t Instant—Start Now First, understand this: building good credit is a marathon, not a sprint. For those planning to apply for a mortgage in the future, lenders typically want to see at least two active credit accounts (credit cards, personal loans, or lines of credit), each with a limit of $2,500 or more , and reporting positively for at least two years . If that sounds like a lot—it is. But everyone has to start somewhere, and the best time to begin is now. Step 1: Start with a Secured Credit Card When you're new to credit, traditional lenders often say “no” simply because there’s nothing in your file. That’s where a secured credit card comes in. Here’s how it works: You provide a deposit—say, $1,000—and that becomes your credit limit. Use the card for everyday purchases (groceries, phone bill, streaming services). Pay the balance off in full each month. Your activity is reported to the credit bureaus, and after a few months of on-time payments, you begin to establish a credit score. ✅ Pro tip: Before you apply, ask if the lender reports to both Equifax and TransUnion . If they don’t, your credit-building efforts won’t be reflected where it counts. Step 2: Move Toward an Unsecured Trade Line Once you’ve got a few months of solid payment history, you can apply for an unsecured credit card or a small personal loan. A car loan could also serve as a second trade line. Again, make sure the account reports to both credit bureaus, and always pay on time. At this point, your focus should be consistency and patience. Avoid maxing out your credit, and keep your utilization under 30% of your available limit. What If You Need a Mortgage Before Your Credit Is Ready? If homeownership is on the horizon but your credit history isn’t quite there yet, don’t panic. You still have a few options. One path is to apply with a co-signer —someone with strong credit and income who is willing to share the responsibility. The mortgage will be based on their credit profile, but your name will also be on the loan, helping you build a record of mortgage payments. Ideally, when the term is up and your credit has matured, you can refinance and qualify on your own. Start with a Plan—Stick to It Building credit may take a couple of years, but it all starts with a plan—and the right guidance. Whether you're figuring out your first steps or getting mortgage-ready, we’re here to help. Need advice on credit, mortgage options, or how to get started? Let’s talk.

Bank of Canada Rate Announcement Dec 10th, 2025

By Diane Buchanan • December 10, 2025
Bank of Canada maintains policy rate at 2.1/4%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario December 10, 2025 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank’s October Monetary Policy Report (MPR). Canada’s economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility. Canada’s labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued. CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year’s GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target. If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is January 28, 2026. The Bank’s next MPR will be released at the same time.