Stated Income Mortgage in Canada: What the 90% Ceiling and the 5.85% Premium Actually Cost

Wednesday, 4 November 2026 — the bottom line. A stated income mortgage is not a shortcut around paperwork. It is a priced product, and the price is the mortgage insurance premium. At 90% loan-to-value the stated income mortgage premium is 5.85% of the loan, against 3.10% for the same borrower who documents the same income. On a $700,000 purchase with 10% down, that is $36,855 instead of $19,530 — a $17,325 penalty for skipping the file. Stated income also stops dead at 90% LTV, so the insured 95% route stays shut and you need $25,000 more cash at close. The Bank of Canada raised its policy rate to 2.50% on 28 October 2026 and prime moved to 4.70%, with the next decision on 9 December 2026.

Self-employed borrowers get told two things, and both are half true: that banks will not count your real income, and that stated income is how you get around it. The arithmetic is narrower. Documenting income is cheaper than most self-employed buyers believe, and a stated income mortgage costs far more than the phrase "low doc" suggests.

What a stated income mortgage actually is in 2026

A stated income mortgage lets you declare your annual income and business revenue on the application instead of proving it line by line. The declared figure must be reasonable for your industry, business type and how long you have been operating. It is not unverified: Sagen's Business for Self programme and Canada Guaranty's Low Doc Advantage both require proof of at least two years in business from an arm's-length third party, and the lender still pulls line 15000 from your latest Notice of Assessment to confirm you have no tax arrears.

So you are not hiding anything. You are asking an insurer to accept a number your tax return does not show, and you are paying for that privilege. CMLS, one of the lenders offering the programme, also adds a 5 basis point rate premium to every stated income mortgage it funds — small, but real.

The premium is the product

This is the part almost no Canadian coverage puts in dollars. Insurance premiums on a stated income mortgage sit on a different grid from documented income, and the two are furthest apart exactly where high-ratio buyers live.

Loan-to-value	Documented income (CMHC Self-Employed)	Stated income (Sagen BFS / Canada Guaranty Low Doc)	Difference
Up to 65%	0.60%	1.50% (often lender-paid)	+0.90 pts
65.01% to 75%	1.70%	2.60%	+0.90 pts
75.01% to 80%	2.40%	3.30%	+0.90 pts
80.01% to 85%	2.80%	3.75%	+0.95 pts
85.01% to 90%	3.10%	5.85%	+2.75 pts
90.01% to 95%	4.00%	not available	—

Premium grids read from CMHC's and Sagen's own pages on 4 November 2026. Amortizations over 25 years add 0.20% to the stated income premium — $1,260 on a $630,000 loan.

Read the bottom two rows twice. The gap sits at 0.90 points for most of the grid, then triples at 90% LTV. A stated income mortgage at 90% is not slightly dearer than documenting — it costs nearly double the premium.

The worked file: $700,000 with 10% down

Take a self-employed buyer purchasing at $700,000 with $70,000 down. Property tax of $4,200 and heat of $1,200 a year are stated assumptions, not market data. The rate is the lowest advertised insured five-year fixed as at 4 November 2026, plus the 5 basis point premium on the stated income mortgage side.

Item	Documented income	Stated income
Base mortgage	$630,000	$630,000
Insurance premium	$19,530 (3.10%)	$36,855 (5.85%)
Total borrowed	$649,530	$666,855
Rate used	4.44%	4.49%
Monthly payment, 25-year amortization	$3,573.34	$3,687.16
Balance owing after five years	$569,696	$585,378

The payment gap is $113.82 a month, which looks survivable. Of that, only $18.02 is the 5 basis point rate premium; the other $95.79 is the extra insurance premium being financed over 25 years. Over a five-year term you pay $6,829 more and you still owe $15,682 more at renewal. The all-in five-year cost of choosing a stated income mortgage on this file is $22,511.

All payments use Canadian semi-annual compounding: the annual rate halved, compounded to the one-sixth power, less one.

The 90% ceiling and the insured 95% route

A stated income mortgage caps at 90% LTV for purchases. Documented self-employed income reaches the insured high-ratio bands through CMHC Self-Employed, which charges the standard grid — the same premium a salaried borrower pays, with no surcharge for being self-employed.

Mind the minimum down payment rules, because this is where the comparison is usually got wrong. On a $700,000 purchase the floor is 5% of the first $500,000 plus 10% of the remaining $200,000, so $45,000, not $35,000. That puts you at 93.57% LTV, a $655,000 loan and a 4.00% premium of $26,200. The point stands even so: documenting lets you close with $25,000 less cash than the 10% down a stated income mortgage requires. For a buyer whose constraint is cash rather than income, documenting is not a nicety; it is the only route that works.

CMHC's programme sits below a $1,500,000 property value for one to two units, caps amortization at 25 years, needs a credit score of 600 on one borrower, and runs GDS 39% and TDS 44% at the greater of the contract rate plus 2% or 5.25% — the same mortgage stress test everyone else faces.

The 65% cliff nobody prices

At 65% LTV and below, insurance on a stated income mortgage is routinely arranged by the lender at no cost to the borrower. One dollar above that line and the borrower pays 2.60% of the whole loan.

Amount borrowed	LTV	Premium charged	Monthly payment at 4.49%
$455,000	65.00%	$0	$2,515.77
$455,070	65.01%	$11,832	$2,581.58
$460,000	65.71%	$11,960	$2,609.55

Seventy extra dollars of borrowing triggers $11,832 of premium — about $169 of premium for every $1 borrowed over the line. If you are financing anywhere near 65% of value, finding the cash to stay under it is the highest-return decision in the deal. The logic runs the other way too: moving from 80% to 90% LTV borrows $70,000 more and lifts the premium from $18,480 to $36,855, so that last $70,000 carries a 26.25% up-front charge before you pay a cent of interest.

What documenting actually requires

The documented route deserves a hard look: the bar is lower than the folklore, as our self-employed qualification guide shows. CMHC Self-Employed asks for your Notice of Assessment with the T1 General and a Statement of Business Activities (T2125). For sole proprietorships and partnerships, income may be grossed up 15%, or adjusted by adding back eligible deductions.

That 15% does real work. On our $700,000 file the documented route needs about $147,000 of qualifying income at GDS 39% and the 6.44% qualifying rate. After the gross-up, line 15000 itself only has to average about $127,800 — the gross-up supplies roughly $19,200 of the requirement. Borrowers who write off aggressively and assume they are disqualified often have not run it.

Where the documented route genuinely fails

It fails when your net income simply is not there: a business reinvesting everything, a first strong year after two thin ones, or an owner paid in dividends only, which lenders treat differently from salary. There a stated income mortgage does something no paperwork can — qualifying you on gross revenue rather than net income. That is a real service, and now you know its cost.

When a stated income mortgage is still the right answer

It is the right answer when the alternative is no approval, or a B-lender at a materially higher rate. At 80% LTV the insured route on our file costs $18,480 in premium but prices at insured rates. Comparing five-year totals — sixty payments plus the balance still owing — the break-even B-lender rate is roughly 5.32% with no lender fee, or 5.06% with a 1% fee. Above those rates the insured stated income mortgage wins; below them the B-lender does. Those B-lender figures are illustrative assumptions, not quotes, because alternative-lender pricing is not published.

Know the exclusions before you plan around a stated income mortgage. Commission income is not eligible. Refinances are not permitted on at least one major lender's programme. Gifted and borrowed down payments are barred, and at least 5% must come from your own resources. Tax arrears and a previous bankruptcy are hard declines, and Sagen requires no mortgage default in seven years and no delinquencies in twelve months. Sagen asks a minimum credit score of 600 above 80% LTV and recommends 680 at or below it; lenders sit higher, with CMLS looking for Beacon 660 and 680 on the same split.

What to do before you apply

• Pull your last two Notices of Assessment and write down line 15000 for each, then average them and add 15%. That number, not your gut, decides whether you need a stated income mortgage at all.
• Ask your accountant which eligible deductions could be added back. Capital cost allowance is the usual candidate.
• If you are a sole proprietor, confirm the 15% gross-up applies to you; incorporated owners paid only in dividends should ask how the lender treats that income before anything else.
• Calculate your LTV to two decimal places. If you are between 65.00% and 66%, price what it costs to get under 65.00%.
• Work out your real minimum down payment — 5% of the first $500,000, 10% above it — before assuming the insured route is out of reach.
• Get the premium quoted in dollars, in writing, before you commit. Ask which insurer and band.
• Confirm the amortization. Going over 25 years adds 0.20%.
• Clear any tax arrears first. They are a hard decline, not a negotiation.
• Secure a rate hold early. Self-employed files take longer to underwrite, and a hold protects you while documents move.
• Price both routes over five years, including the balance at renewal, not just the monthly payment.

Common questions

Does a stated income mortgage cost more in interest, or just in premium?

Mostly premium. On our file the rate difference was 5 basis points, worth $18.02 a month. The premium difference was worth $95.79 a month plus $15,682 more owing after five years. The number you should be watching is the premium, not the rate.

Is self-employed income penalised by mortgage insurers?

Not when it is documented. CMHC Self-Employed charges the same premium bands as any other homeowner loan, and its own page describes the insurance as available at no extra cost. The surcharge appears only when you move to a stated income mortgage instead.

Could the rate picture change before I close?

Yes, and it already has. The Bank of Canada raised the policy rate 25 basis points to 2.50% on 28 October 2026, ending a long run of holds, and prime followed to 4.70% the next day. The next decision is 9 December 2026. September CPI ran 3.1% year over year and the economy shed 68,000 jobs that month, so the labour figures due 6 November and the CPI due 16 November will set the tone — a market expectation that can change, not a forecast. The five-year Government of Canada bond yield was 3.46% on 2 November 2026, down 12 basis points from 29 October, and fixed rates on a stated income mortgage follow that yield rather than the policy rate.

Nothing here is an approval, a rate or an outcome to treat as settled. Premium grids and lender policies move, and the only figures that bind are the ones your lender puts in writing.