Employment Letter for a Mortgage: Free Canadian Template

Copy the template, send it to your employer, and get it back right the first time

Almost every mortgage application in Canada needs a letter of employment. It is also the document that most often comes back wrong, which costs you days at exactly the point in a purchase where you do not have days to spare.

Below is a template your employer can copy straight onto company letterhead, plus the wording for the situations that usually cause a letter to be sent back: commission income, hourly work, contract roles, probation, and parental leave.

The Standard Employment Letter Template

This covers a salaried, permanent employee. Copy it, replace anything in [square brackets], and have it printed on company letterhead and signed.

[COMPANY LETTERHEAD]
[DATE]
To Whom It May Concern:
RE: Confirmation of Employment for [EMPLOYEE FULL NAME]
This letter confirms the following details regarding [EMPLOYEE FULL NAME]’s employment with [COMPANY NAME]:
Position: [JOB TITLE]
Start date: [START DATE]
Employment status: Permanent, full-time

Hours: [e.g. 37.5] hours per week

Gross annual salary: $[AMOUNT] per year

Probation: [EMPLOYEE FIRST NAME] is not on probation.

[EMPLOYEE FIRST NAME]’s employment is ongoing and we are not aware of any planned change to their position, hours, or compensation.
Should you require any further information, please contact me directly at [PHONE] or [EMAIL].
Sincerely,

[SIGNATURE]
[SIGNER FULL NAME]
[SIGNER JOB TITLE]
[COMPANY NAME]
[COMPANY PHONE] | [COMPANY ADDRESS]

What Your Letter Must Contain

Lenders are checking for a specific set of facts. If any one of them is missing, the letter usually comes back for a rewrite:

Company letterhead with a phone number and address a lender can actually call
The date the letter was written. Most lenders want it recent, typically within 30 to 60 days of your application
Your full legal name, matching your other documents
Your job title
Your start date
Employment status: permanent or contract, full-time or part-time
Guaranteed hours per week if you are paid hourly
Gross income, before deductions, stated annually or hourly
Probation status, stated explicitly. “Not on probation” is what a lender wants to read
A signature, plus the signer’s printed name, title, and direct contact details

The last one matters more than people expect. Lenders verify employment letters by phone, and a letter signed by someone unreachable is a letter that stalls.

Wording for Situations That Get Letters Rejected

If any of these apply to you, add the relevant paragraph to the template above. Each one answers a question the lender would otherwise send the letter back to ask.

Hourly, not salaried

[NAME] is paid $[RATE] per hour and is scheduled for a guaranteed minimum of [NUMBER] hours per week, which equates to approximately $[ANNUAL AMOUNT] gross per year.

Commission or bonus income

In addition to a base salary of $[AMOUNT], [NAME] earns commission. [NAME] earned $[AMOUNT] in commission in [YEAR] and $[AMOUNT] in [PRIOR YEAR]. This commission structure is ongoing.

Lenders generally want a two-year history before they will use variable income, and often average it. Stating both years up front saves a round trip.

Still on probation

[NAME] is currently within a probationary period that ends on [DATE]. We have no concerns regarding [NAME]’s performance and fully expect employment to continue beyond that date.

Probation is not automatically a decline, but it narrows your lender options. Tell your broker before you write an offer, not after.

Contract or fixed term

[NAME] is employed on a fixed-term contract ending [DATE]. [NAME]’s contract has been renewed [NUMBER] times since [YEAR], and while we cannot guarantee future renewal, we anticipate the contract continuing.

Recent raise or promotion

Effective [DATE], [NAME] was promoted to [NEW TITLE] and their gross annual salary increased from $[OLD] to $[NEW].

Worth including whenever your current salary is higher than what your last T4 or pay stubs show. Without it, the lender may qualify you on the older, lower figure.

Currently on parental leave

[NAME] is currently on parental leave and is scheduled to return to work on [DATE] in the same position at a gross annual salary of $[AMOUNT]. [NAME]’s position is being held.

Overtime you rely on

[NAME] regularly works overtime as part of their role, earning $[AMOUNT] in overtime in [YEAR] and $[AMOUNT] in [PRIOR YEAR]. Overtime is expected to remain available.

Not every lender will use overtime income, and those that do usually average two years. If a chunk of your income is overtime, that shapes which lender we take you to.

What Else You Will Need

An employment letter almost never stands alone. For a salaried employee, expect to provide:

Your two most recent pay stubs
Your T4 slips for the last two years
Your Notice of Assessment from the Canada Revenue Agency for the last two years
Photo identification

If you are self-employed, the employment letter is replaced by two years of T1 Generals, Notices of Assessment, and in many cases business financial statements. That is a different process, and worth starting earlier than you think.

Common Reasons an Employment Letter Gets Sent Back

No letterhead. A letter typed in a plain document, however accurate, tends not to be accepted.
Undated, or dated months ago. Lenders want a current letter.
Net income instead of gross. Always state gross, before deductions.
Silence on probation. If the letter does not address it, an underwriter has to ask.
Signed by someone with no title or contact number. The lender cannot verify it.
Hours left vague. “Approximately 30 to 40 hours” reads as unpredictable income. A guaranteed minimum reads as stable.
A figure that contradicts your pay stubs. Any gap between the letter and your stubs needs explaining in the letter itself.

Frequently Asked Questions

How recent does an employment letter need to be?
Most lenders want a letter dated within 30 to 60 days of your application. If your file takes longer than expected, expect to be asked for a fresh one.

Can my employer email the letter instead of mailing it?
Yes. A signed PDF on letterhead, emailed to your broker, is standard. Nobody needs to fax anything.

Does the letter have to come from HR?
Not necessarily. It needs to come from someone authorised to confirm your employment and reachable by phone. In a small company that is often the owner or office manager.

What if I just started a new job?
That is workable, particularly if you are in the same field and off probation. Bring your signed offer letter and your first pay stub, and talk to a broker before you write an offer so you know which lenders will work with your situation.

Will the lender call my employer?
Frequently, yes. It is a routine verification call to confirm the letter is genuine, which is why the signer’s direct contact details matter.

I am paid partly in cash. Does that count?
Only income that appears on your T4 and tax filings can be used to qualify. Cash income that is not declared cannot be included, regardless of what the letter says.

Get Your Documents Checked Before You Submit

Most employment letter problems are caught in thirty seconds by someone who reads these every day. Send us your letter before it goes to a lender and we will tell you whether it will clear, or exactly what wording to add.

Call 780-974-1270 or get in touch. If you are earlier in the process, our first-time home buyer guide walks through the full document list, and pre-approval is where most buyers should start.