Self-Employed Mortgage in Canada: Rates, Requirements and Which Lenders Say Yes
Write-offs that save you tax cost you mortgage. Lenders in Canada read business-for-self income very differently from one another, and which one reads yours generously decides the whole file.
Who a self employed mortgage covers
- Sole proprietors, incorporated business owners and commissioned contractors
- Anyone whose line 15000 understates what the business actually earns
- Buyers turned down by a bank that would only look at two years of NOAs
What lenders look for on a self employed mortgage file
| Two years of T1 Generals and Notices of Assessment | The default at every A lender. They average line 15000 across two years and lend against that number. |
| Add-backs | Some lenders will add back capital cost allowance, business-use-of-home and one-time expenses. Others will not. This alone can move qualifying income by 20% or more. |
| Stated income | For borrowers who can show the business is real — bank statements, invoices, a GST return — without the tax return supporting the income. Priced above prime and usually capped at 80% loan-to-value. |
| Corporate add-back of retained earnings | If you leave money in the company, a handful of lenders will count a share of it. Most will not. |
Self-Employed mortgage rates: what it costs
Self-employed files that document income conventionally price on the normal shelves. Stated-income files sit on the uninsured shelf and typically run 50 to 150 basis points above the board.
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Self-Employed by province
Land transfer tax, minimum down payment and typical prices differ by province.
Self-Employed mortgage questions
How long do I need to be self-employed?
Two years is the standard, evidenced by two Notices of Assessment. Some lenders will look at a shorter history if you were previously employed in the same field — moving from salaried electrician to incorporated electrician is a much easier story than a career change.
Can I get a mortgage on stated income?
Yes, though not from a big bank at a posted rate. Stated-income programs exist at several monolines and alternative lenders, usually needing 20% down, a clean credit history and evidence the business is genuine. Expect to pay for it in rate.
Do I need to stop writing off expenses?
Not permanently, but the two years before you buy matter. Reducing write-offs raises your reported income and your tax bill — worth modelling both, because the extra tax is sometimes cheaper than the worse mortgage.
Have a self-employed file looked at
When you are ready to do something with these numbers, we will introduce you to a licensed broker who can put the file in front of lenders. Nothing here obliges you to.
