Self-Employed Mortgage in Canada: How to Get Approved in 2026
Being your own boss shouldn't stop you from owning a home. Here's exactly how self-employed Canadians can qualify for a mortgage — even if your income looks complicated on paper.
If you're self-employed, you've probably heard that getting a mortgage is harder for business owners. And honestly? There's some truth to that — but it's far from impossible.
The reality is that lenders see self-employed applicants differently than T4 employees. But with the right preparation and documentation, thousands of Canadian entrepreneurs, freelancers, and small business owners get approved for mortgages every year.
Let me show you exactly how it works.
Why Are Self-Employed Mortgages Different?
When you work for an employer, proving your income is simple: a few pay stubs and a letter from HR. Done.
Self-employed income is more complex. Your revenue fluctuates. You write off expenses (as you should). Your "official" income on your tax return might be much lower than what you actually take home.
Lenders know this. That's why they have specific programs and verification methods for self-employed applicants.
How Self-Employed Canadians Qualify
There are three main ways to verify your income:
1. Traditional Income Verification (2-Year Average)
Most prime lenders will average your last 2 years of declared income from your tax returns (Line 15000 for business income). This is the most common method and usually gets you the best rates.
Best For
Business owners with stable, consistent income over 2+ years who don't write off too aggressively.
2. Stated Income Programs
Some lenders offer "stated income" mortgages where they'll accept your stated income with less documentation — but you'll need at least 2 years in business and usually a larger down payment (often 20%+).
Trade-Off
Higher rates (usually 0.5-1.5% more) and larger down payment required. But can be worth it if your declared income doesn't reflect your true earnings.
3. Bank Statement Programs
Some alternative lenders will review 12-24 months of business bank statements to calculate your income based on deposits. This is great if your tax returns show low income but your bank shows healthy cash flow.
Documents You'll Need
Self-Employed Documentation Checklist
- 2 years of T1 Generals (personal tax returns) with all schedules
- 2 years of Notice of Assessments (NOAs) from CRA
- Business financial statements (if incorporated)
- Business license or articles of incorporation
- 6-12 months bank statements (business account)
- Proof of business existence (website, contracts, invoices)
Tips to Improve Your Approval Odds
1. Plan Ahead (12-24 Months)
If you're thinking about buying in the next year or two, talk to your accountant about showing more income on your tax returns. Yes, you'll pay more tax, but you'll also qualify for a larger mortgage with better rates.
2. Keep Business and Personal Finances Separate
Co-mingling funds is a red flag for lenders. Use a dedicated business account for all business transactions.
3. Save a Larger Down Payment
20%+ down payment gives you access to more lenders and better rates. It also eliminates CMHC insurance requirements.
4. Maintain Good Credit
Your credit score matters even more as a self-employed applicant. Pay everything on time. Keep credit utilization under 30%.
5. Work With a Mortgage Agent
This is key. Banks have one set of products. A mortgage agent like me has access to 50+ lenders, including those with programs specifically designed for self-employed borrowers.
Frequently Asked Questions
How long do I need to be self-employed to get a mortgage?
Most lenders require at least 2 years of self-employment history. Some alternative lenders may accept 1 year with a larger down payment. If you're newly self-employed but have experience in the same industry, that can help.
Can I use my gross business revenue to qualify?
No. Lenders look at your net business income (after expenses). This is why some business owners with high revenue but aggressive write-offs may need stated income programs.
What if my income went down last year?
Lenders typically use a 2-year average, but if your income dropped significantly, they may use the lower year. Explaining the reason (COVID, one-time expense, business pivot) can help. Alternative lenders may be more flexible.
Are rates higher for self-employed borrowers?
Not necessarily. If you qualify through traditional income verification with strong documents, you'll get the same rates as T4 employees. Stated income or alternative programs typically have rates 0.5-1.5% higher.
Ready to Get Started?
Being self-employed doesn't mean homeownership is out of reach. With the right preparation and the right mortgage professional, you can absolutely get approved.
I've helped dozens of self-employed clients — from freelancers to incorporated business owners — find mortgage solutions that work for their unique situations.
Free Consultation for Self-Employed Borrowers
Let's review your situation and find the best path to approval. No obligation, no pressure.