How to get a mortgage when you're self-employed in Ontario

Self-employed borrowers in Ontario usually qualify by proving income history. Lenders typically use a 2-year average of your income, so your paperwork needs to cover at least two years. Work in this order: gather documents, find your category, check how your income will be counted, pick a route, then compare lenders. No approval is guaranteed.

Before you start: what to gather

Have these ready before you talk to any lender:

• Notices of Assessment (NOA) and T1 Generals for the last 2 to 3 years.
• Business financial statements, if you're incorporated.
• GST/HST returns. If your taxable business revenues exceed $30,000, you must collect HST/GST and file a return.
• A business license and Articles of Incorporation, where they apply to your business.

Confirm your tax returns are filed and up to date. Most lenders want proof that you have no tax arrears before they approve a mortgage.

Then decide how much down payment you can bring. Some lenders look for at least 10%, and some self-employed products ask for anywhere from 10% up to 35%.

Step 1: Work out which self-employed category fits you

Lenders tend to sort self-employed borrowers into a few groups, and each group has its own paperwork.

Category	What you typically need
Sole proprietor with verifiable income	At least 2 years of income confirmation from T1s and NOAs
Sole proprietor without verifiable income	A minimum of 6 months of business deposit history
Incorporated with qualified income	At least 2 years of T1s and business financial statements

Apex Mortgage Group gives special handling to self-employed income, so knowing which category fits you helps when you talk to an agent.

Step 2: Check how lenders will count your income

Lenders typically use net income after expenses, not gross revenue. If your income is declining, they may use only the lower year instead of the two-year average.

Write-offs matter here. Overly aggressive write-offs, or reporting a loss, can lower the amount you qualify for. Before you apply, pull your last two returns and look at the net income line the way a lender would. If that number is much lower than what your business actually earns, discuss the gap before you submit anything.

Step 3: Choose between standard and stated-income routes

Standard route. If your most recent NOA shows enough income to qualify, under a standard mortgage you can borrow up to 80% of the purchase price or value with no default insurance, or up to 95% with default insurance. Depending on how the application is structured, you may be asked for extra documents. Some self-employed mortgage products accept a minimum down payment of 5%, and gifted funds are usually allowed, though your own savings are preferred.

Stated-income route. Stated income is the income you report to a lender rather than the income on your tax return. Insured stated-income mortgages allow a down payment as low as 10% but require mortgage default insurance. Only some insurers cover stated-income applications, and CMHC requires full income verification.

Step 4: Compare lenders through a mortgage agent

Guidelines for self-employed borrowers differ, so the same file can look different at different lenders. A mortgage agent can compare them for you.

Apex Mortgage Group works through the Mortgage Intelligence network, with access to 50+ national, regional, and private lenders. Recognized names available through the network include Scotiabank, TD, MCAP, First National, Manulife Bank, and Meridian.

Apex's advice covers term, penalty, and flexibility as well as rate, which matters if your income moves from year to year. Lender availability depends on your individual application and current lender guidelines, and no approval is guaranteed.

Step 5: Know what a consult covers

Apex Mortgage Group offers a Mortgage Consult: a 15-minute, no obligation call to review your mortgage needs. The document list at the start of this article covers what a review of your file typically draws on.

Apex serves Ottawa, Orleans, Embrun, Barrhaven, Kanata, and Ontario more broadly, and stays involved through renewals and future moves.

If you're also weighing affordability, read how much mortgage you can afford in Canada.

FAQ

Can I qualify with less than two years of self-employment?

Some files without verifiable income can rely on a minimum of 6 months of business deposit history. That route is a different product, and lender guidelines vary, so ask for a review of your specific situation.

Does a mortgage agent charge a fee for self-employed files?

Complex borrower scenarios may warrant a fee in some cases, so ask about fees during your consult. This guide explains how mortgage brokers get paid.