Own your business? We know exactly which lenders approve self-employed income — and which don't.
The problem is structural, not personal: good accounting minimizes taxable income, and mortgage qualification is based on taxable income. A contractor netting $180,000 in the business who declares $65,000 on Line 15000 gets qualified on $65,000 at a traditional A-lender.
There are four assessment routes in Canada, and knowing which lender uses which is most of the job:
The 15% gross-up is the most underused tool at the A-lender level: if your two-year average Line 15000 is $80,000, several lenders will qualify you on $92,000 without any special program.
Sagen's Business for Self program and Canada Guaranty's Low Doc Advantage both allow a self-employed borrower to state a reasonable income for their industry and experience rather than relying only on tax returns. Key parameters:
This program routinely approves files that a branch declines outright, and most borrowers have never heard of it because branches cannot always place it.
Two things underwriters check that surprise people: whether the business is still active and in good standing, and whether deposits in the bank statements are consistent with the stated income. Lumpy, unexplained deposits get scrutinized.
Self-employed approvals are won in the two tax years before the application, not during it. If a purchase is on the horizon, plan the returns with your accountant:
Consultant, incorporated four years, $210,000 in gross corporate revenue, $58,000 declared on Line 15000, $60,000 retained in the corporation, credit score 720, 20% down on an $850,000 home.
Same borrower, same business, five very different answers. Figures are illustrative — test your own file in the affordability calculator, then let us place it with the lender whose rules fit your income structure.
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The same minimums as any borrower: five per cent on the first five hundred thousand, ten per cent up to one point five million, and twenty per cent above that. Many self-employed borrowers choose twenty per cent or more because it opens uninsured and alternative programs with easier income proof.
Not on a standard A-lender program, which uses net income from Line 15000. Add-backs for non-cash deductions, insured business-for-self stated income, and B-lender bank-statement programs all let you qualify on considerably more than your declared net.
Two years is the standard requirement and the returns should be from the same line of work. One year is possible with select lenders when credit, down payment and prior experience in the same industry are strong.
It is an insured program that lets a self-employed borrower state a reasonable income for their industry instead of relying only on tax returns. It requires two years in business, good credit, and allows up to ninety per cent loan-to-value with an insurance premium surcharge, at normal A-lender rates.
Not if the file fits an A-lender or an insured business-for-self program — pricing is identical to a salaried borrower. Only alternative and B-lender placements carry a premium, usually one to two percentage points, and those are typically a one to two year bridge.
It is difficult but not impossible. The strongest cases are borrowers who moved from employment to contracting in the same field, where prior T4 history plus current contracts demonstrate continuity. Expect a larger down payment and fewer lender options.
Very often, yes. Unpaid tax balances can result in a lien against the property and most lenders require them cleared, with proof, before funding. Deal with CRA arrears well before applying.
Frequently the numbers favour it. Paying eight to twelve thousand dollars more in tax across the two qualifying years can add a couple of hundred thousand dollars in borrowing capacity, which usually outweighs the tax cost. Plan it with your accountant two years ahead of the purchase.
How Canadian lenders read business income, and what documents actually get a self-employed file approved in 2026.
A lenders normally average your last two years of line 15000 income from your T1 Generals and Notices of Assessment. Incorporated owners can often add back retained earnings from the corporation with accountant-prepared financials and proof they own the business.
Two years of self-employment history is the standard at A lenders. With less than two years, prior experience in the same field, strong credit and a larger down payment can still work — usually through an alternative lender.
Yes, but write-offs cut the income lenders can use. Options are an A lender using your declared income, a B lender using bank-statement or stated-income programs at a rate premium, or reducing write-offs for two tax years before you apply. Our stated income vs CRA tax calculator shows what each route actually costs.
Typically two years of T1 Generals with all schedules, two years of Notices of Assessment showing no taxes owing, business registration or articles of incorporation, two years of financial statements if incorporated, and six to twelve months of business bank statements.
Not if you qualify at an A lender on declared income — the rate is the same as any salaried borrower. Rates rise only when you need a stated-income or alternative program, which typically prices above prime and may include a lender fee.
Yes. Stated-income programs exist at B lenders and, in limited form, through CMHC's self-employed guidelines. Expect a larger down payment, a rate premium and documentation proving the business exists and generates the revenue you state.
The same 5% minimum on the first $500,000 applies if you qualify on declared income with default insurance. Stated-income and alternative programs generally require 20% or more, and private lending usually 25%+.
Yes. Lenders require Notices of Assessment and confirmation that no income tax is owing — outstanding CRA balances can create a lien ahead of the mortgage and will stop most approvals.
Many lenders allow a portion of retained earnings to be added back when you own 100% of the business, the corporation is profitable, and an accountant provides the financial statements. Policy varies widely by lender, which is exactly where shopping the file pays.
A lenders generally want 680 or higher, alternative lenders can work from roughly 600, and private lenders focus mainly on equity. A strong score is the fastest way to offset variable business income.
It is possible under two years with documented experience in the same industry, contracts or invoices showing steady revenue, meaningful savings and a 20%+ down payment — most often through an alternative lender, with a plan to move to an A lender once two tax years exist.
It can do either. Incorporating lets you retain earnings and add them back with the right documentation, but it also adds paperwork and lenders that will not look past your personal T1. Decide with both your accountant and your broker before restructuring.
Commission and T4A contract income are usually averaged over two years, the same as business income. Declining year-over-year income is normally taken at the lower figure, so timing your application after a strong year matters.
Yes, to 80% of value, using the same income documentation as a purchase. Business owners often refinance to clear higher-rate business debt or to fund an HST or corporate tax instalment at mortgage rates instead of card rates.
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