Self-employed? See exactly how much more you'd pay in taxes if you declared higher income to qualify for a prime mortgage rate. The numbers may surprise you.
2026 Tax Brackets
Federal + all provinces
Marginal Tax Math
Precise bracket calculations
5-Year Impact
Total tax cost over term
Enter your actual CRA income and the income you'd need to declare to qualify at a prime lender.
Alt-Lender Fee Reality Check
Stated-income deals usually carry an upfront lender fee (~1%) and a broker fee (~0.5%–1%). Add them in to see if the tax savings still win.
Additional Annual Tax Cost
$16,420
Federal Tax
Provincial Tax (Ontario)
Less: Alt-Lender Upfront Fees (1% lender + 0.5% broker)
Net Savings After Fees (Term)
*Based on 2026 Canadian federal and provincial tax brackets.
See which tax brackets consume the additional declared income.
What you actually declared
What you'd need to declare
Additional Tax Burden Over 5 Years
$82,100
That's how much more you'd pay CRA just to qualify for a prime rate. Is it worth it?
We compute your marginal tax using the 2026 Canadian federal brackets and provincial brackets to show you the real cost of declaring higher income.
Each dollar of income is taxed at the bracket rate it falls into — not a flat rate. This calculator applies the correct marginal rate to each portion of income.
Each province has different tax brackets. Alberta has a flat provincial rate structure while Ontario and Quebec have progressive systems with surtaxes.
The extra taxes aren't a one-time cost. You'd need to declare the higher income every year to maintain mortgage qualification, compounding the cost over your term.
Self-employed, commission earners, gig workers, and small business owners who have flexibility in how much income they report on their T1.
Stated income refers to the income a self-employed borrower declares on their mortgage application. Some lenders accept stated income programs where the borrower states their income without traditional T4 verification, though they may require business documentation to support the declared amount.
Prime (A) lenders use your CRA-verified income with the stress test to determine how much you can borrow. If your declared T1 income is low — common for self-employed borrowers who write off expenses — you may not qualify for the mortgage amount you need without declaring higher income.
Alternative (B) lenders have stated income programs specifically designed for self-employed borrowers. These programs allow you to state your reasonable income without matching your CRA T1 exactly. The key is that your stated income must be a reasonable estimate of what you actually earn.
A-lenders (prime) are major banks with the lowest rates but strict rules — they require CRA-verified income and apply the federal stress test. B-lenders (alternative) accept stated income programs and use more flexible underwriting, with rates typically 1-2% higher.
Alternative lenders verify income reasonableness through business bank statements, GST/HST returns, business registration, CRA Notices of Assessment, client contracts, and sometimes a letter from your accountant. They look at overall cash flow rather than T1 net income.
Stated income programs are for self-employed individuals, commission earners, gig economy workers, and small business owners. You typically need 2+ years self-employed, a valid business license or GST number, and minimum 20% down payment.
Our brokers specialize in self-employed mortgages. We'll show you the exact numbers for your situation — no guessing required.
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