London & Southwestern Ontario
Self-Employed Mortgage in London, Ontario
Self-employed borrowers are not harder to approve because of the business — they're harder to approve because the tax return is written to minimize income, and the lender reads the tax return.
The work is in presenting the file so the income a lender can use reflects what the business actually produces.
Nandan Bajani · Licensed Mortgage Agent | Ontario · The Mortgage Firm Inc.
Incorporated vs sole proprietor
A sole proprietor's income is usually the two-year average of line 15000 on the T1 Generals, supported by Notices of Assessment. An incorporated owner's file can also draw on corporate financial statements, retained earnings and dividends, depending on the lender and the ownership percentage.
What lenders want to see
- Two years of T1 Generals and Notices of Assessment with no outstanding balance owing to CRA
- Business registration or articles of incorporation, and often a licence where applicable
- Two years of corporate financial statements for incorporated applicants
- Six to twelve months of business bank statements for alternative programs
- Confirmation that HST and payroll accounts are current
Add-backs and stated income programs
Some non-cash expenses — capital cost allowance, business-use-of-home, certain one-time items — can be added back to declared income at some lenders. Where declared income still doesn't support the mortgage, insured stated-income programs and alternative lenders can consider reasonable business income supported by bank deposits, typically at a higher rate and with larger down payment requirements.
How the tiers usually stack up
Prime lenders offer the best pricing with the strictest documentation. Alternative (B) lenders accept broader income evidence with a rate premium and a lender fee, often on a one- to two-year term used as a bridge back to prime. Private lending is a short-term, equity-driven solution used when neither fits and there's a clear exit.
London-area realities
Trades, transport operators and independent healthcare professionals are a large share of self-employed files here. If you're planning a purchase in the next 18 months, the way your accountant files this year matters as much as your down payment — worth a conversation before the return is finalized.
Related reading
Questions people ask
How long do I need to be self-employed to get a mortgage?+
Two years of history is the common benchmark for prime lenders. Shorter histories can sometimes work with alternative lenders or where there is directly related prior employment.
Can I use business bank statements instead of tax returns?+
Some alternative and stated-income programs allow it, generally with a larger down payment and a higher rate than prime.
Does owing CRA stop an approval?+
An unpaid CRA balance is a significant obstacle with prime lenders. Sometimes it can be paid out through a refinance, depending on equity.
Do I need 20% down if I'm self-employed?+
Not always. Insured self-employed programs exist with less down, subject to documentation and insurer approval; alternative lenders typically want 20% or more.
Let's structure your self-employed file properly
A short conversation is usually enough to know what's realistic. No obligation, no pressure.