How to Qualify for a Mortgage as a Self-Employed in BC

Why Self-Employed Borrowers Are Different

When a salaried employee applies for a mortgage, the process is straightforward. Lenders look at their T4 slips, pay stubs, and Notice of Assessment, and within hours they can calculate exactly how much that person can borrow.

For the self-employed, it's more complex. Your income may fluctuate from year to year. You likely claim legitimate business expenses that reduce your taxable income. You might pay yourself in dividends rather than a salary. None of this means you can't afford a mortgage—it just means lenders need to look at your finances differently.

Your Mortgage Options as a Self-Employed Borrower

1. The Standard Mortgage

If your last two years of tax returns show strong, stable income, you may qualify for a standard mortgage with the same great rates available to salaried borrowers. This is the simplest path when it works.

What you'll need:

Two years of Notice of Assessments (NOA) and T1 Generals
Business registration documents
Minimum 5% down payment
Good credit (typically 650+)

2. The CMHC Self-Employed Program

This is one of the most valuable programs for self-employed borrowers. Instead of using only your bottom-line net income, lenders can 'add back' certain business expenses to give you credit for your true earning power.

Common add-backs include:

15-20% of your declared income
Home office expenses
Vehicle expenses and depreciation
Capital Cost Allowance (CCA)

What you'll need:

Two years of tax returns
Business financial statements
Minimum 10% down payment

3. The Stated Income Program

This is often the perfect solution for self-employed borrowers whose tax returns don't reflect their actual cash flow. You state your income, and we verify it using your business bank statements. No tax returns are required for qualification.

What you'll need:

6-12 months of business bank statements showing deposits
Business registration
Minimum 20% down payment
This program works even with clients with bad credit

4. The Net Worth Program

If your income is modest but you've accumulated significant assets, this program can be a game-changer. Lenders consider your liquid assets—savings, investments, GICs—alongside your income to qualify you for a larger mortgage.

What you'll need:

Two years of tax returns
Statements showing your liquid assets
Minimum 20-35% down payment
No mortgage insurance required

5. Private Mortgages

For urgent situations or complex cases, a private mortgage provides a fast, equity-based solution. Approval is based on your property's value rather than your income or credit history. This is typically a short-term bridge while you improve your financial picture.

What you'll need:

Minimum 25-35% down payment or equity
Property appraisal
Any credit situation considered
No income verification required

More information on mortgages for self-employed here: https://www.ipotekacanada.com/index.php/mortgages-selfemployed

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