Self-Employed? Here’s What You Really Need to Know About Getting a Mortgage in Canada

Being self-employed comes with freedom, flexibility, and pride — but when it comes to getting a mortgage, it also comes with a few extra hurdles.

If you run your own business, you already know you work harder than anyone else. Getting approved for a mortgage shouldn’t feel like another full-time job. So, let’s simplify it.

Here’s what every self-employed Canadian borrower needs to know before applying for a mortgage.

1. More Scrutiny Doesn’t Mean Less Opportunity

Lenders don’t love surprises — and self-employed income can look unpredictable. That’s why they’ll dig deeper into your finances than they would for a salaried employee.

What this means for you:

• You’ll need to prove your income stability over time.

• You’ll be asked for more documents.

• Your accountant might get more questions than usual.

But this isn’t a red flag. With the right prep, you can absolutely qualify — and often on competitive terms.

Pro tip: The earlier you start working with a mortgage professional, the better we can position your file before you even apply.

2. Organization Is Everything

When you’re self-employed, the story your numbers tell matters. Lenders want to see that your income is steady, your business is real, and your cash flow is healthy.

Here’s a quick document checklist:

Document	Why Lenders Care	Pro Tip
2 years of personal & business tax returns	Confirms consistent income	File early and keep electronic copies handy
Year-to-date profit & loss statement	Shows how your business is performing right now	Update monthly so you’re never scrambling
3–6 months of bank statements	Verifies deposits and ongoing business activity	Keep business and personal accounts separate
Business license, contracts, or invoices	Proves ongoing, legitimate work	Save PDFs as you go — not just at tax time
List of one-time or add-back expenses	Helps increase your usable income	Flag these for your broker to explain clearly

Your paperwork tells your financial story — make sure it’s a story of stability and growth.

3. Your Accountant and Your Broker Should Be Talking

Most business owners maximize deductions to lower taxes (and fair enough!). But here’s the catch — those same deductions reduce your qualifying income.

Lenders use net income, not gross. So, while you might save on taxes, you could be limiting your mortgage size.

Some expenses can be “added back” by underwriters (like depreciation or one-time costs), but others can’t. That’s why collaboration between your accountant and mortgage broker is key.

Quick takeaway: Plan your taxes with your mortgage goals in mind — not just your tax bill.

4. Consistency Is King

Lenders want to see:

• At least 2 years of self-employment in the same line of work.

• Income that’s stable or trending upward.

• A solid client base or contract pipeline.

If you recently transitioned from an employee role to self-employment in the same industry, your previous work history can still count in your favour.

It’s all about proving that your business — and your income — are sustainable.

5. Cash Flow and Credit Both Matter

Even if your business is booming, lenders want to know you can handle the unexpected.

They’ll look at:

• Credit score: Keep it above 680 for the best rates.

• Debt-to-income ratio (DTI): Less debt = more flexibility.

• Cash reserves: Having savings or a business buffer shows financial strength.

Bottom line: A healthy personal and business financial picture gives you leverage — both in approval and in negotiating better rates.

6. You Have Options (Even if the Banks Say No)

The good news? Traditional banks aren’t your only path.

Here are a few alternatives worth exploring:

• Conventional loans (best for borrowers with strong, verifiable income).

• Stated income or bank-statement programs (use your actual deposits, not just taxable income).

• Alternative or “non-QM” lenders (flexible underwriting for solid self-employed borrowers).

• Co-borrowers (a spouse or partner with salaried income can strengthen your file).

An experienced broker will know exactly which path fits your situation — and which lenders actually understand entrepreneurs.

7. Start the Process Early

Here’s the truth: the biggest wins come from preparation.

Do this before you start house-hunting:

1. Get a credit check and fix any issues.

2. Gather your business and tax documents.

3. Review your income structure with your accountant.

4. Talk to a mortgage professional who understands self-employed income.

5. Build your down payment and emergency reserves.

This proactive approach turns a stressful mortgage process into a confident one.

Final Thoughts

Being self-employed shouldn’t mean being penalized. You’ve built your own business — and that same determination can get you into your next home.

The key is preparation: organized documents, strategic tax planning, and working with someone who knows how to tell your story to lenders.

If you’re self-employed and want to understand what you qualify for — without surprises — let’s chat.

👉 Book a quick call at LaframboiseMortgage.ca and we’ll create a clear plan to turn your hard work into home ownership.