Being your own boss comes with many perks, but when it comes to getting a mortgage in Canada, being self-employed can sometimes make the process more complicated. Fortunately, with the right documents, preparation, and guidance, it’s entirely possible to qualify for a mortgage—even if your income looks different from the standard pay stub.
Whether you’re a freelancer, contractor, small business owner, or gig worker, here’s what you need to know to secure a mortgage in 2025.
Why Self-Employed Mortgages Are Different
Lenders assess risk based on consistent and verifiable income. For salaried employees, this typically involves a few recent pay stubs and a letter of employment. For the self-employed, however, income can vary from month to month or year to year, which adds a layer of complexity to the approval process.
Lenders are not necessarily less likely to approve a mortgage application from a self-employed borrower, but they will require more paperwork and may scrutinize your financial situation more closely.
What Documents Do Lenders Require?
Here’s what you’ll likely need to provide:
- Two years of personal Notices of Assessment (NOA) from the Canada Revenue Agency (CRA)
- Two years of T1 General tax returns
- Financial statements if you are incorporated or have a registered business
- Business license or articles of incorporation
- Proof of HST or GST payments and registration (if applicable)
- Contracts or client agreements (to demonstrate ongoing income)
- Bank statements (to show regular deposits and financial health)
If your income has grown recently, some lenders may consider using your most recent year’s income or average your last two years—depending on the lender’s policies and your specific case.
Tips to Strengthen Your Application
Here are a few ways to improve your chances of approval and secure better rates:
1. Reduce Your Debt Load
Your total debt service (TDS) ratio is a key factor in mortgage approval. Paying down credit card balances or other loans before applying can improve your numbers.
2. Have a Larger Down Payment
A down payment of 20% or more can make a big difference, especially if you want to avoid CMHC mortgage insurance.
3. Keep Your Financial Records Clean
File taxes on time, keep business and personal finances separate, and avoid cash-based income that can’t be verified.
4. Consider a Stated Income Mortgage
Some lenders (including many B-lenders) may offer stated income mortgages where you declare your income and verify it through bank deposits and other documentation. These options often come with higher interest rates but can be a viable path for many self-employed buyers.
5. Work with a Mortgage Broker
A mortgage broker can guide you through the process, help you gather the right documents, and match you with lenders who are comfortable working with self-employed applicants.
CMHC and Self-Employed Mortgages
Canada Mortgage and Housing Corporation (CMHC) does offer mortgage insurance for self-employed borrowers, provided you meet their documentation requirements. If you’re putting down less than 20%, mortgage insurance is mandatory.
For more on what CMHC looks for and how debt ratios are assessed, check out our guide: Understanding CMHC Debt Ratios – What Every Homebuyer Needs to Know
What If You’re Newly Self-Employed?
If you’ve been self-employed for less than two years, your options may be more limited, but not impossible. Some lenders may still work with you, especially if you have:
- A history in the same industry or role
- A strong credit profile
- A large down payment
- Evidence of consistent revenue and growing income
It’s best to speak to a mortgage professional to explore your eligibility.
Final Thoughts
Getting a mortgage while self-employed in Canada is possible—it just takes a bit more planning. With strong documentation, a clear income picture, and the right broker by your side, you can access mortgage solutions that fit your business and your life.
Need help navigating the process? Apply for a mortgage online today, or get in touch with us directly to talk about your options. We’re here to help.
