Mortgage services · 02
Mortgages for the self‑employed
You run a business, drive for yourself, or freelance. Your tax return makes your income look small — on purpose. Banks read that number literally. The right lenders read the real story.
Who this is for
Business owners, contractors, freelancers, gig workers, incorporated professionals.
The core problem
Tax write-offs lower the income lenders see on paper.
The fix
Programs that accept bank statements and invoices as proof of income.
The basics
Why banks say no to good businesses
When you are self-employed, your accountant helps you claim expenses. That lowers your taxes. It is legal and smart.
But it also lowers the income shown on your tax return. A bank looks at that small number and says: “You cannot afford this mortgage.” Even when your business earns well.
There are two ways forward:
- The normal way. If your last two tax years show enough income on average, you qualify like anyone else. Best rates, standard process. About half of self-employed people I meet are in this group and do not know it.
- Special programs. If your paper income is too low, some lenders accept other proof instead: 6–12 months of business bank statements, invoices, and contracts. This is often called “stated income” lending. It shows the money as it really moves.
What this means for you — an example
A business earns $180,000 a year. After write-offs, the tax return shows $68,000.
On paper income, a bank might lend about $340,000. A bank-statement program that sees the real cash flow might lend about $640,000. Same person, same business — very different answer.
Honest talk
The trade-offs, in plain words
Special programs are real and widely used. But they come with conditions. You should know them before you start:
- Down payment. Usually at least 10% for insured self-employed programs, and 20% for bank-statement lending.
- Rate. Alternative lenders charge a little more. Insured programs are close to normal rates. A strong file often pays barely more than a salaried person.
- Taxes must be paid. Money owed to the CRA (Canada's tax agency) is the fastest way to sink a file. If you owe taxes, tell me first — there are ways to handle it.
A higher rate is usually temporary. The plan is: get the mortgage now, build two clean tax years, then move to a better rate at renewal.
The process
How we build your file
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A short call about your business
How you get paid, how long you have been at it, what your bank statements show. Fifteen minutes.
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We pick the lane
Conventional if your tax returns support it. A self-employed program if they don't. You see both options priced.
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We gather the proof
Tax returns and notices of assessment, or bank statements and invoices — I tell you exactly what is needed, nothing extra.
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Approval and keys
I place the file with the lender whose program fits it. You get the approval, the rate hold, and a clear list of next steps.
Get ready
The documents that make your file strong
You will not need all of these. I tell you which ones apply after our first call.
- Two years of Notices of Assessment — the yearly summary the CRA sends after you file your taxes.
- Six to twelve months of business bank statements — the core of a bank-statement program.
- Business registration or articles of incorporation.
- Recent invoices or signed contracts showing work coming in.
- Financial statements, if your accountant prepares them.
- Proof your taxes are paid — a CRA statement of account showing a zero balance.
What this means for you
Do not wait until everything is perfect. Bring what you have to the first call — even a rough picture tells me which lenders fit.
If something is missing, we make a short list and work through it together. Most files need two or three items, not twenty.
Common questions
Questions people ask
Short answers in plain English. Your situation may be different — ask me anything on a free call.
How do my write-offs affect my mortgage?
Ordinary lenders use your income after write-offs. Every dollar you deduct is a dollar they don't count. Some lenders add back paper-only expenses, like part of your vehicle or home-office costs. Bank-statement programs skip the tax return and look at real deposits instead.
How long do I need to be self-employed?
Two years is the standard ask. Under two years, options are fewer but real — especially if you stayed in the same field. For example, an employee electrician who became an independent electrician can often qualify sooner.
Do I need a bigger down payment?
If you qualify the normal way: no, the same 5–10% minimums as anyone. Insured self-employed programs usually want 10%. Bank-statement lending usually wants 20%. Family gifts can top up most of these.
Will my rate be much higher?
Usually not as much as people fear. If you qualify conventionally, you get normal rates. Alternative lending costs more, but it is typically a short-term step — one or two terms — while your tax record catches up. Then we move you to a better rate.
I owe money to the CRA. Is that the end of it?
No, but it has to be dealt with. Most lenders will not fund a mortgage while taxes are owing, because the CRA can register a claim against your home. Sometimes the tax debt is paid out of the mortgage itself at closing. Tell me early and we plan for it rather than discovering it late.
Your business is real. Your mortgage should be too.
Bring your real numbers — bank statements, invoices, whatever you have. I will find the lender who reads them properly.