Self-Employed Mortgages in Ontario

Why banks say “come back in two years”

Most bank (A-lender) programs qualify self-employed borrowers on taxable income — the lower of what you declared or your net income after write-offs. After legitimate business expenses, that number can look far smaller than what the business actually earns, and a file that should qualify gets declined.

Banks also usually want two full years of self-employed income on file before they'll consider you. If you've recently incorporated, switched from a salary to dividends, or just finished your first strong year, you may hear “come back in two years.” It's a policy rule, not the final word — there are lenders that look at the picture differently.

What lenders actually look at (T1 Generals, NOAs, business financials)

Lenders that work with self-employed borrowers usually look beyond a single tax line. They often review your T1 Generals and Notices of Assessment (NOAs) for the past two years, your business financials or financial statements, and sometimes bank statements that show the real cash flowing through the business.

Some alternative programs consider stated income or add-back certain expenses to reflect what the business truly earns. The goal is a common-sense read of your income rather than a formula that penalizes you for writing off legitimate costs. What each lender accepts varies, so we compare the options that fit how you actually earn.

Incorporated vs sole proprietor

How you're structured changes how income is documented. A sole proprietor's business income flows on the T1 General, so lenders usually qualify you on the net income shown there. An incorporated business may pay you a mix of salary and dividends, and the way you draw income can affect what a lender will use to qualify you.

Incorporated borrowers sometimes have retained earnings in the company that don't show as personal income. Some lenders and alternative programs can look at corporate financials or add-back salary and dividends to build a clearer picture. There's no single rule — the right approach depends on your structure and the lender's program.

A vs B vs private lenders for self-employed borrowers

A-lenders (banks and prime lenders) usually offer the lowest rates but have the strictest income rules. If your taxable income doesn't qualify, the next step is often a B-lender (alternative lender), which may use stated-income or bank-statement programs and typically charges a somewhat higher rate.

Private lenders are a short-term option when A and B programs won't work — for example, a brand-new business or a credit blip alongside self-employed income. Private mortgages cost more and run short terms, so we usually treat them as a bridge and plan the exit back to an A or B lender. We check A and B options first before going private.

• A-lenders: lowest rates, strictest taxable-income rules.
• B-lenders: alternative programs, may use stated income or bank statements.
• Private lenders: short-term bridge, higher cost, used when A and B won't work.
• We compare across all three before recommending a path.

Documents to have ready

Having the right documents ready usually speeds things up. For most self-employed files we ask for T1 Generals and Notices of Assessment for the past two years, business financials or bank statements, two pieces of ID, and your consent for a credit check.

If you're incorporated, we may also ask for corporate financials and a summary of how you draw income. We'll send a clear list and a secure upload link once we know which programs fit your file, so you only gather what's actually needed.

Next steps and options

Every self-employed file is a little different, so the first step is a quick review of how you earn, your credit, and your down payment. From there we can usually tell you which lenders and programs fit and what they'll need.

Share a few details and we'll map out your options across 30+ lenders. There's no obligation, and you'll know where you stand before you commit.