Posted On Sep 19, 2025

You did it. You took the leap, built a business from the ground up, and are navigating the exciting, challenging world of entrepreneurship. You’re a creator, a problem-solver, and a risk-taker. And when you go to apply for a mortgage, the bank often treats you like you’re just… a risk.

It’s a frustrating reality for many self-employed people in the GTA. You might be earning a great income, but because your tax returns are designed to minimize your taxable income (as they should be!), the number on Line 15000 doesn't tell the whole story.

The good news? Getting a mortgage when you’re the boss is entirely possible. It just requires a different approach, a deeper level of preparation, and the right expert on your side.

The Core Challenge: Proving Your "Real" Income

When a traditional lender looks at a T4 employee, they see a simple, predictable number. When they look at a self-employed applicant, they see deductions, expenses, and fluctuating income streams. Their primary method of qualifying you is to take a two-year average of your declared net income, after write-offs. For many successful entrepreneurs (and ones with great accountants!), that number is too low to qualify for the home they can genuinely afford.

So, how do we bridge the gap between what the taxman sees and what your business actually earns?

The Solution: The "Stated Income" Program

This is the single most important tool for self-employed borrowers. Offered by a range of A-lenders and alternative lenders, a stated income mortgage allows you to "state" a higher, more realistic income for qualification purposes, provided you can support it with other evidence.

This isn't a "no-doc" loan from the old days. You still need to prove your business is legitimate and thriving. The requirements typically include:

  • Proof of Business: Articles of incorporation, business license, or GST/HST registration. You must generally be in business for a minimum of two years.

  • Excellent Credit: A strong credit score (usually 680+) is non-negotiable. It’s your best indicator of financial responsibility.

  • Significant Down Payment: You will typically need a larger down payment than a T4 employee. A minimum of 20% is common, and a larger down payment (25-35%) will open up even more options.

  • Supporting Documents: Lenders want to see evidence that your stated income is reasonable. This can include 6-12 months of business bank statements showing strong cash flow, contracts from clients, and financial statements prepared by an accountant.

Pro Tips for a Smoother Approval

  1. Keep Your Finances Clean. Don't mix personal and business expenses in the same account. Clean, organized bank statements make it much easier to demonstrate the health of your business.

  2. Pay Your Taxes on Time. Lenders will always ask to see your ‘Notice of Assessment’ (and sometime your Statement of Account) from the CRA to ensure you have no outstanding taxes. Falling behind on taxes is a major red flag.

  3. Work with a Mortgage Agent Who Gets It. Many bank specialists are only trained to handle traditional applications. An experienced mortgage agent who works with self-employed clients knows which lenders have the most favourable programs and how to package your application to tell the right story from the very beginning.

Being your own boss shouldn't penalize you from owning your own home. Your business is a testament to your drive and discipline—let's make sure your mortgage application reflects that, too.

Let's connect!

Ready to discuss your home ownership goals and a Better Mortgage by Dom?

 

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