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Mortgages for the Self Employed

Small and medium-sized businesses are the engine of the Canadian economy.

When it comes to mortgages, it hasn't always paid to be self-employed - because reducing your taxable income can make it difficult to qualify for the mortgage you deserve. We understand business owners because we’re business owners, too.

What’s better, we have a long list of institutional and private lenders that offer excellent mortgage options for self-employed Canadians. These lenders in Canada understand that self-employed individuals have tax write-offs creating significant reductions in their declared income. With these mortgage lenders, you will not be required to prove your income and a reasonable estimate of your annual income will be acceptable.

There are few different programs for self-employed that don’t require income verification.

 1. Insured mortgage. Up to 90% of the property value for purchase and 80% for refinancing.

 This program is designed for self-employed borrowers who are unable to provide traditional income verification but have a proven 2-year history of managing their credit and finances responsibly.  In addition, the borrower is required to declare their annual income, which should be reasonable based on the industry, length of operation and type of business. Borrower will get the best lender’s rates. Minimum 5% down payment from the borrowers own savings. The remainder may be gifted from an immediate family member. Borrowed down payments are not permitted.

  • Documentation requirements - Any one of the following must confirm at least 2 years business-for-self tenure:
  • Recent Notice of Assessment or a signed affidavit by the borrower(s) to confirm no income tax arrears.
  • Business License
  • Articles of incorporation
  • GST/HST Return Summary
  • T1 Generals with statement of business activities attached for a minimum 2 years prepared by an arm's length third-party
  • Audited Financial Statements for the last 2 years, prepared and signed by a CA

 

  1.  Conventional mortgage. Up to 80% of the property value for purchase owner occupied houses. Up to 75% for condos or rental properties. Down payment can be gifted, borrowed, or from savings. Clients will have to show documents that business exist and operate (recent invoice for example). No income verification or Notice of Assessment required, but client have to sign declaration that no tax owed and Stated income declaration. Clients with any credit will be considered under this program. Rates are slightly higher that best rates, but borrowers will save on mortgage insurance.

 

  1.  Conventional mortgage with 30-35% down payment. This program allows clients with good credit to get best lender’s rates. Clients should be prepared to present confirmation of at least 2 years Business-for-self, and show no tax arrears via recent Notice of Assessment in most cases.

 

What's Next ?
Call to review your mortgage strategy
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*Subject to approved credit, income verification and meeting lending credit granting criteria. Applies to residential mortgages only and some conditions may apply. O.A.C., E.O.E All content is subject to change without notice.

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