Does Going Back to School Mean You Can’t Get a Mortgage in Alberta?

Written By Renee Huse

Renee Huse, founder of Spire Mortgage Team in Alberta, has helped many clients navigate this exact question — sometimes at the kitchen table with a mug of coffee, sometimes over Zoom between their classes. The answer isn’t a simple “yes” or “no.” It’s more like, “It depends on your income picture, your future earning potential, and how lenders see your stability.”

We’ve seen everyone from nursing students in Calgary to trades apprentices in Red Deer figure out a way to make homeownership work while they’re in school — but the path isn’t identical for everyone.

What We’ll Cover

How Lenders View Students Applying for Mortgages

When you go back to school, your income usually changes. If you’ve taken a leave from a full-time job, you might now rely on part-time work, savings, or student loans. For lenders, the biggest question is: can you afford the payments now and in the near future?

If you’re in school and working part-time, lenders will often average your income over the last two years — which can be challenging if your hours dropped recently. If your program is short and you’re heading into a high-demand field (think nursing, engineering, or trades), some lenders will take that into consideration, especially if you have a signed job offer in hand.

The key factor is proof of income stability — either now or in the very near term. This doesn’t always mean you must wait until after graduation, but you do need a well-documented plan.

Income Types Lenders Accept When You’re in School

Not all income is created equal in the eyes of a lender. Some forms will count toward your approval, and others won’t.

Income lenders typically accept: Salaried or hourly income with guaranteed hours (lenders may use your two-year average or current guaranteed income), spousal income, and rental income. If you have a legal basement suite in Edmonton or rent out a room in your Calgary condo, a portion of that income can be included — you can read more about qualifying with rental suite income. In some high-demand professions, future income with a signed job offer may also be usable.

Income that usually won’t count: Student loans, grants, or bursaries (these are liabilities, not income), and informal cash jobs not reported on taxes for at least two years.

Using a Co-Signer or Guarantor

If your own income isn’t enough to qualify right now, a co-signer (usually a parent or family member) can bridge the gap.

Here’s how it works: the co-signer’s income is added to your application, which can increase your maximum purchase price. The co-signer is legally on the mortgage — in Alberta, this also means they’re equally responsible for the payments if you miss them. You can remove the co-signer later through a refinance once your income is strong enough. For deeper detail, see our guide on co-signers.

We recently worked with an Edmonton apprentice electrician whose dad co-signed on a duplex purchase. After two years, he refinanced, removed his dad, and now owns the home in his own name. Pro tip: choose a co-signer with strong credit and low personal debt — approvals are smoother.

Strategy: Applying Before You Go Back to School

One of the best ways to avoid the income qualification challenge is to apply for your mortgage before you start your program.

If you’re currently working full-time with a steady income, lenders will qualify you based on that — not the reduced income you’ll have as a student. Once approved, you can lock in a rate for up to 120 days, giving you time to find the right property. If you buy before school starts, you can set yourself up with stable housing for your studies without scrambling later.

Example: Mark, a 27-year-old from Red Deer, was accepted into an engineering program starting in September. We helped him buy a townhouse in July while he was still working full-time at $70,000/year. His mortgage was approved at a 4.34% conventional 5-year fixed. By the time he started school, he already had his home — and the bank wasn’t concerned about his reduced part-time income because the mortgage was already funded.

How Student Loans Impact Approval (with Math)

Student debt sits inside your TDS (Total Debt Service) ratio. Lenders either use your actual monthly payment or, if you’re not in repayment yet, a notional payment (often ~1% of the balance) to estimate the impact.

Alberta example: You’re in Calgary with a $22,000 student loan. Not in repayment yet. Lender uses 1% → $220/month added to TDS. If your gross monthly income is $4,500 (part-time work + spousal income), that $220 alone uses 4.9% of your income. Stack this with a $1,820 mortgage payment and $200 in other debts, and you can see how TDS tightens quickly. Planning the timing of when loans enter repayment — and exploring repayment options — can make or break your approval.

Using a Rental Suite or Room to Boost Approval

Adding a legal suite or renting a room can improve both cash flow and qualifying power.

Edmonton suite example: You buy a $430,000 home with a legal basement suite renting for $1,250/month. Many lenders will include 50%–100% of that rent in your qualifying income (policy varies). Even at 50%, that’s $625/month added to income for debt ratios — and $1,250/month to your real-life cash flow. If you’re studying at NAIT or the U of A, that buffer can be the difference between stress and stability. Dive deeper here: qualifying with rental suite income.

Buy Before vs After School (Alberta Comparison)

Here’s a side-by-side to help decide when to purchase.

Scenario Buy Before School Buy After Graduation
Income used to qualify Current full-time income New full-time income (post-grad) or two-year average
Cash flow during studies Tighter; plan savings/rental income Easier once income starts
Market risk Lock price/payment sooner Risk of higher prices later
Stress test impact Based on today’s qualifying rate Whatever rates are after graduation
Best for Those with savings, a co-signer, or suite income Those preferring simpler budgeting during school

Six-Month Cash-Flow Plan While You Study

We build a buffer so payments feel manageable from day one. Here’s a simple roadmap our Alberta clients use:

  1. Emergency cushion: Target 3 months of mortgage + utilities before closing.
  2. Bridge funds: Keep 2–3 months of living costs liquid for the first term.
  3. Suite/room rental: Aim to have your tenant lined up 2–3 weeks pre-possession.
  4. Part-time income: Lock guaranteed shifts before classes start; avoid overestimating hours.
  5. Automate: Set mortgage payments for the day after payday; set up separate “tax/condo fee” subaccount.
  6. Review at month 3: Adjust payments using prepayment privileges or budget tweaks if needed.

Document Checklist for Student Buyers (Alberta)

  • Photo ID (front/back) and proof of Alberta address
  • Most recent 3 months of bank statements (down payment source & closing costs)
  • Employment letters and last 2 pay stubs (you and spouse/partner)
  • Signed future employment offer (if applicable: start date, salary, position)
  • Last 2 years of T4s and Notice of Assessment (if employed), or T1 Generals + NOAs (if self-employed)
  • Student loan statements (balance and current/expected payment)
  • Lease agreement or market rent estimate (if using suite/room income)
  • Gift letter + proof of gifted funds received (if applicable)

Alberta Case Study: Nursing Student in Calgary

Property: $350,000 condo in Calgary Beltline area
Down Payment: $17,500 (5% minimum for insured mortgage)
Rate: 3.99% insured 5-year fixed
Amortization: 25 years

Sarah’s part-time income from a hospital admin job was $26,000/year, and she had about $15,000 in savings. She also had a letter from Alberta Health Services offering her a full-time nursing role starting two months after graduation at $78,000/year.

Because she had a firm employment contract, we were able to use her future income to qualify her — even though she was still in school.

Payment breakdown: With standard insurer premium added to the mortgage, the monthly principal & interest payment at 3.99% over 25 years landed around $1,820–$1,845 (plus condo fees and property tax). The lender was comfortable because future income was guaranteed and Sarah had savings to bridge the first few months.

Emotional impact: “Having my own place to study and rest between shifts has been a game-changer — I couldn’t imagine still living with roommates while juggling nursing school.”

What to Expect for Down Payment and Approval

  • Minimum down payment: 5% for homes under $500,000; funds must be your own or an eligible gift. See down payment options.
  • Debt ratios: GDS/TDS still apply — student loans count toward debt load.
  • Future income: Choose a lender that accepts signed job offers (not all do).
  • Self-employed: Expect to provide two years of tax returns; timing matters if your income dips during school.

Glossary

Gross Debt Service (GDS): Percentage of your income for housing costs (mortgage, taxes, heat, condo fees).

Total Debt Service (TDS): Percentage of your income for all debts, including car loans, credit cards, and student loans.

Insured Mortgage: Less than 20% down; requires mortgage default insurance (e.g., CMHC).

Future Income Letter: Signed contract from an employer stating your upcoming start date, salary, and position.

Amortization: Time it will take to pay off your mortgage at your current schedule.

Bridge Funds: Savings or credit used to cover expenses until your higher income begins.

FAQs

Can I use student loans as income for a mortgage?
No. They’re liabilities and reduce your borrowing capacity.

Do lenders care what program I’m taking?
Yes — especially if relying on a future job offer. High-demand programs are favoured.

What if I’m self-employed and going back to school?
You’ll need two years of tax returns. Timing your application is key.

Should I wait until after graduation to buy?
Not always. A job offer and savings may allow you to buy before graduation.

Can a co-signer help?
Yes. A strong co-signer can increase approval, and you can remove them later through refinance.

Next Step

Give us a call or fill out an application at this link: https://spiremortgage.ca/apply-now and our team will get in touch with you to start building a plan that suits you.

—
Written by the Spire Mortgage Team, Alberta’s strategic mortgage planning experts.
Learn more: https://spiremortgage.ca

Renee Huse
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