Self-Employed? What You Really Need to Know About Getting a Mortgage in Ontario

Being self-employed means freedom, flexibility and pride, but when you’re buying a home in Ontario, it also means you’ll face a few extra steps. You already know you work harder than anyone else. Getting approved for a mortgage should not feel like another full-time job. So let’s simplify this. Here’s exactly what every self-employed buyer in Ontario needs to know before applying for a mortgage.

1. More Scrutiny Doesn’t Mean Less Opportunity

When you run your own business, lenders see a different story than someone on a steady salary. Self-employed income can look unpredictable, so lenders dig deeper. That means:

• They’ll expect proof your income is reasonably stable over time.

• They’ll ask for extra documents beyond the usual pay stubs.

• Your accountant may face more questions than usual. But remember: this isn’t a block to getting a mortgage, it just means preparation matters. With the right setup, you can qualify on strong terms. Pro tip: The earlier you involve a mortgage professional, the better. They can help position your file properly before you apply.

  
  

2. Organisation Is Everything

As a self-employed buyer, the financial story you present is just as important as the numbers themselves. Lenders want evidence that your business is real, your income is steady, and your cash flow is under control. Here’s a checklist to get you ready:

Document	Why Lenders Care	Pro Tip
Two years of personal & business tax returns	Confirms consistent income history	Get electronic copies now-don’t wait until tax time
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 real deposits and business activity	Keep personal and business accounts separate
Business licence, contracts, or invoices	Proves your work is ongoing and legitimate	Save PDFs as you go-don’t bury them
List of one-time expenses or “add-backs”	Allows your broker to boost usable income	Flag these early so they’re clearly explained

Your paperwork needs to support a story of stability, growth, and professionalism.

3. Your Accountant and Your Mortgage Broker Should Be On The Same Page

Many self-employed business owners do everything possible to minimize taxes and that’s smart. But when it comes to mortgages, banks look at net income, not gross. The more you legitimately deduct expenses, the less you might qualify for. Some expenses may be “add-back” eligible (for example, one-time costs or depreciation) but many are not. That’s why your accountant and your mortgage broker should talk before you submit an application. Key takeaway: Plan your taxes with your mortgage goals in mind, not just your tax savings. A little foresight now can make a big difference later.

4. Consistency Is King

Lenders want to see:

• At least two years of your business operating in the same line of work.

• Income that’s steady or trending upward.

• A solid client base or a contract pipeline that suggests the business isn’t one-and-done. If you recently switched from being employed to self-employed, and you stayed in the same industry, your previous salaried history can still count in your favour. The message lenders want to hear: “This business works, and I’m going to keep doing it.”

  
  

5. Cash Flow and Credit Both Matter

Even with a booming business, the lender is still concerned about you being able to meet your mortgage payments if things shift. They’ll look at:

• Credit score: Keep this above about 680 to access the best rates.

• Debt-to-income ratio (DTI): The less debt you carry, the more mortgage you may be approved for.

• Cash reserves: Having savings or a buffer shows you’re prepared for the unexpected.Bottom line: A healthy personal and business financial picture gives you leverage—not just for approval, but for negotiating better rates.

  
  

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

It’s good news: Traditional banks aren’t your only avenue. Especially in Ontario, for self-employed borrowers, there are a few mortgage paths worth knowing:

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

• Stated income or bank-statement programs (where lenders look at deposits rather than just tax returns).

• Alternative or “non-A” lenders (more flexible underwriting, higher rates).

• Co-borrowers (e.g., a spouse or partner with full-time salaried income improving the file). Working with a mortgage broker who understands self-employment is critical here, they’ll direct you to the lender that fits your file, not the other way around.

  
  

7. Start the Process Early

Here’s the reality: The biggest wins come before you start house-hunting. Do this ahead of time:

• Check your credit score and fix any issues.

• Pull together your business and tax documents.

• Review your income structure with your accountant.

• Speak with a mortgage professional who knows self-employed income.

• Build your down-payment and emergency reserves. When you’re prepared, the mortgage process stops being stressful and starts feeling like a targeted business decision, because it is.

  
  

Final Thoughts

Being self-employed shouldn’t mean being penalized when it comes to homeownership. You’ve worked hard to build your business; use that same determination for buying your next home. The key: Preparation. Organized documents, smart tax strategy and a broker who knows your story and how to tell it right. If you’re self-employed and want to understand exactly what you qualify for, without surprises...let’s chat.