Getting a mortgage is more complicated when you're self-employed — but it’s definitely possible. Many British Columbians work for themselves, run small businesses, or freelance, and lenders are increasingly offering solutions designed just for them.
If you're self-employed and looking to buy a home, refinance, or renew your mortgage, this guide explains how it all works, what lenders look for, and how I can help you qualify.
Why It's Harder When You're Self-Employed
Lenders see self-employed income as less stable than a salary from an employer. Even if you make good money, it’s often harder to prove because your income may vary from year to year, and many business owners write off expenses that reduce their reported income.
Traditional lenders prefer consistent, documented income. When that’s not easy to show, you’ll need to take a different approach.
What Lenders Look For
Lenders will want to verify:
- How long you have been self-employed
- Your average income based on tax returns or bank deposits
- Business stability and growth
- Your credit score and existing debt load
- The type of industry you're in (some are considered higher risk)
You will generally need to provide:
- Two years of personal and business tax returns
- Notices of Assessment from CRA
- Business financial statements (for incorporated businesses)
- 6 to 12 months of bank statements
- Business license or articles of incorporation
Some lenders will accept stated income or use bank deposit averages instead of traditional tax documents. These options often fall under alternative lending.
Common Mortgage Options for Self-Employed Borrowers
1. Traditional Lenders (Big Banks)
If your reported income is strong, you may still qualify with a traditional lender. You will need clean credit, low debt ratios, and consistent earnings.
2. Alternative Lenders
If your tax documents do not reflect your true income, an alternative lender may use gross deposits or stated income. You may need a larger down payment (usually more than 20%) and can expect a slightly higher rate.
3. Private Lenders
If your situation is complex — such as recent self-employment or credit challenges — private lenders focus on your equity and property value more than your income.
How Much Can You Borrow?
Like any borrower, how much you can borrow depends on your income, debts, and credit. Lenders use a Gross Debt Service (GDS) and Total Debt Service (TDS) ratio to calculate affordability.
If your income varies year to year, lenders may average it or use your lowest reported amount. That’s why it’s important to structure your income properly if you’re planning to buy or refinance.
Tips to Improve Your Chances
- Keep your credit score strong (pay bills on time, limit credit usage)
- Reduce personal and business debt before applying
- Work with an accountant to maximize reported income
- Save for a larger down payment
- Have all documents ready and up to date
How a Mortgage Broker Helps
As a mortgage broker, I work with lenders who specialize in self-employed borrowers. I understand how to present your income clearly and find lenders who see the full picture.
Here’s how I help:
- Review your documents and explain what’s needed
- Match you with lenders who accept your type of income
- Compare options across 30+ lenders
- Advise you on whether to use a traditional, alternative, or private solution
- Guide you through the entire process from application to funding
Final Thoughts
Being self-employed does not mean you can’t get a mortgage — you just need to take the right approach. With careful planning and the right lender, you can qualify for a mortgage that fits your goals and your business lifestyle.
If you are self-employed and looking to buy, refinance, or renew, let’s talk. I will help you understand your options and make sure your mortgage works for you — not against you.