By Micky Khaneka, licensed mortgage brokerGuides
Reviewed by Micky Khaneka, licensed mortgage broker
You can still qualify for a mortgage in the GTA when personal income is low and business cash flow is strong. Lenders do not have to stop at line 15000 of the T1, the total income on the notice of assessment. Business-for-self programs from CMHC, Sagen, and Canada Guaranty read the legitimate documents behind that line. MKG Mortgages builds those files from the North York office. The lender still decides.
Start on self-employed mortgages if this is your file.
Why the personal number stays low
Owners keep declared personal income low for ordinary tax reasons. A sole proprietor writes off the truck, materials, a home office, and depreciation. An incorporated owner pays a small salary, takes dividends, and leaves the rest in the company as retained earnings. The personal line is a tax result. It is not the whole business.
How a lender looks past the notice
A standard file averages two notices of assessment. A business-for-self file keeps those notices and adds the records that explain them. Stated income means a figure you declare, and that the business can support, backed by legitimate documents: the return, financial statements, GST/HST returns, articles of incorporation, and bank statements. The notice stays in the file, including a check that there are no tax arrears.
CMHC's self-employed product covers sole proprietors, partnerships, and corporations. About 24 months in the business, or in the same work, is recommended, with some flexibility under that. Sole-proprietor and partnership income may be grossed up by 15%, or eligible deductions may be added back. The notice, the T1, and the T2125 are required. On an owner-occupied home of one or two units, CMHC can insure up to 95% of value. Minimum equity is 5% of the first $500,000 and 10% of the rest, so most GTA prices need more than a flat 5% down.
Sagen's Business for Self (Alt. A) and Canada Guaranty's Low Doc Advantage use stated income that has to be reasonable. Both want about two years in business and line 15000 from the latest notice. Sheets published through 2025 cap the loan at 90% of value: at least 10% down, with at least 5% from your own resources and the rest eligible as a family gift. Commission income uses T4A slips on a different program.
Conventional, alternative, and a short bridge
With 20% or more down, an A-lender business-for-self program can read past the personal line. Eligible write-offs can be added back, including depreciation (capital cost allowance), which is not cash that left the business. For an incorporated owner, the lender may use salary, dividends, retained earnings, and corporate net income. The papers are the T1 and notices, the T2125 or the T2 and financials, articles, business bank statements, and GST/HST returns.
An alternative, or B, lender reads business bank statements when add-backs are still not enough: six to twelve months of deposits that match invoices, plus proof the business exists. The down payment is often 20% or more. The cost is higher, and the term is a step toward a later insured or conventional mortgage.
A private or second mortgage is the short bridge when closing will not wait for the next filed year. Fees and the exit are written down first. The longer file is on self-employed mortgages.
What to gather
- Two years of notices of assessment and the matching T1 generals. Line 15000 is the line the insurer asks about.
- The T2125 statement of business activities for a sole proprietor or partner.
- For a corporation: articles of incorporation, the T2, financial statements, and the T4 or T5 slips for salary and dividends.
- Twelve months of business bank statements, plus the personal statements that hold the down payment.
- GST/HST returns, and a business licence or registry printout.
- A short note of the write-offs and of profit left in the company. Your accountant prepares it.
- The purchase agreement, or the current mortgage statement if this is a refinance.
Which path fits you
| Path | Insured | Conventional | Alternative |
|---|---|---|---|
| Less than 20% down | You may qualify with less than 20% down, subject to lender and insurer approval. CMHC, Sagen, and Canada Guaranty can allow 5–10%, depending on the program, income verification, and a purchase price under $1.5 million. An insured program may also mean lower insured rates than an alternative lender, subject to approval. | Usually 20% or more. | Often 20% or more. |
| Down payment | As low as 5–10%. CMHC: up to 95% on a 1–2 unit home you live in (5% of the first $500,000, 10% of the rest). Sagen and Canada Guaranty Low Doc: currently 90% of value, with at least 5% of your own money. Purchase price under $1.5 million. | 20% or more. | Often 20% or more. |
| Documents | Notice with line 15000, about two years in business, T2125 or financials, GST/HST, and articles. CMHC may gross up sole-proprietor income by 15% or add back eligible deductions. | Returns, financials, articles, bank statements, GST/HST, and allowed add-backs, including depreciation and retained earnings. | Six to twelve months of business bank statements, plus registration and the notice. |
| Typical fit | You live in the home, with about two years in business and a reasonable income the documents support. | Strong statements and 20% down, so an A lender can read corporate income or add back write-offs. | Steady deposits, when a gross-up of the personal line is not enough. |
Confirm the current insurer sheet before you waive a condition.
Illustrative example
Illustrative example. An incorporated contractor in Mississauga shows about $45,000 on his notice of assessment. The corporate statements show about $180,000 of net income, most of it still in the company. The file is the T4, the T2, the articles, two notices, and twelve months of the business account. With 20% down, a conventional program can consider that corporate income. The lender still reviews it.
Illustrative example. A sole proprietor in North York writes off a truck, materials, and capital cost allowance, so line 15000 is modest. The T2125 lists the deductions and the deposits match the invoices. CMHC's product may gross that income up by 15% or add back eligible deductions. With 20% down, an A lender's add-back worksheet can do the same.
Illustrative example. A consultant in Vaughan has one strong year and a closing date that will not wait for year two. An alternative lender can read the business bank statements for the months on hand. If that will not fund in time, a private second can bridge the closing, with the exit set once the second year is filed.
Where to take the file
- Self-employed mortgages
- Self-employed mortgages in North York
- Self-employed mortgages in Toronto
- Self-employed mortgages in Vaughan
- Self-employed mortgages in Mississauga
- Self-employed mortgages in Brampton
- Self-employed mortgages in Oakville
- Self-employed mortgages in Milton
Frequently asked questions
Do I need 20% down if I am self-employed?
No. You may qualify with less than 20% down, subject to lender and insurer approval. Insured programs from CMHC, Sagen, and Canada Guaranty can allow less than 20% down, as low as 5–10% depending on the program, income verification, and the purchase price. An insured mortgage requires a purchase price under $1.5 million. You do not always have to use an alternative (B) lender. An insured self-employed program may offer lower insured rates, subject to approval. Not every bank offers that policy. MKG shops multiple lenders and matches the file on policy, rate, and flexibility.
Is line 15000 the income I qualify on?
It is the line insurers ask to see. Gross-ups, add-backs, retained earnings, and bank statements bring in the rest of the business when the program allows them.
Do I need two years in business?
About two years is usual for Sagen, Canada Guaranty Low Doc, and CMHC. CMHC also allows some files under 24 months when the business was purchased, earnings are predictable, or credit is well managed.
What does stated income mean?
You declare an income the business can support, and you back it with legitimate documents. The notice of assessment stays in the file.
Can retained earnings count?
On many conventional programs, yes, when the statements show the profit was earned and left in the company. The lender chooses how much of that income it will use.
When is a private mortgage useful?
When closing is sooner than the document file. It is a bridge, with fees and a written exit back to an insured or conventional mortgage.
Any rate or payment mentioned is illustrative and on approved credit (OAC). It is not a quote, a commitment, or a current offer.
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