Updated: April 2025  |  bremo.io financial guides

Buying a Home with a Baby in Canada — Timing and Planning

Many Canadian families time their home purchase around having a baby. Some want more space before the baby arrives; others find themselves shopping while on parental leave. The timing matters — not just for lifestyle reasons, but for how lenders evaluate your mortgage application when one parent's income has temporarily dropped.

Buying While on Parental Leave

Being on maternity or parental leave doesn't automatically disqualify you from getting a mortgage. Lenders understand that EI benefits are temporary and that you have a job to return to. What they need to see:

• A letter from your employer confirming your position, salary, and expected return date
• Your pre-leave employment income (not your EI benefit amount)
• Normal credit profile and down payment

Some lenders are more accommodating than others. A mortgage broker who works with multiple lenders can find the best fit for your situation.

The Income Drop Challenge

While lenders can use your employment income for qualification, the practical reality is that you're currently earning less. This affects:

• Your ability to save the down payment while on leave
• Your stress level — servicing a new mortgage on reduced income is challenging
• Your emergency fund — this gets depleted faster with baby costs and lower income

Many financial advisors suggest buying either before maternity leave starts or waiting until after returning to work, when income stability is restored.

Down Payment Sources for New Parents

• RRSP Home Buyers' Plan (HBP): First-time buyers can withdraw up to $35,000 per person ($70,000/couple) from their RRSP tax-free for a home purchase. Repaid over 15 years.
• FHSA (First Home Savings Account): Tax-deductible contributions, tax-free withdrawals for first home purchase. Up to $40,000 lifetime limit.
• Personal savings (TFSA or non-registered)
• Gift from parents/family

Space Planning With a Baby

When evaluating homes with a new or expected baby, think beyond today:

• A second bedroom is minimum — where will the baby sleep?
• Consider future children — does the house accommodate growth?
• Proximity to good schools, parks, and childcare (reduce future commute complexity)
• Neighbourhood walkability matters more with a stroller than it did without one

The True Cost of Buying While Childcare Costs Are High

If you're buying a home and starting childcare at the same time, your budget is under maximum pressure. Consider sequencing: defer the home purchase by one year, save aggressively while your childcare spot is secured and costs are known, and buy with a clearer financial picture.