If you are self-employed in Canada, you get a mortgage the same way anyone else does, except you prove your income with tax documents rather than pay stubs. Most lenders want two years of Notices of Assessment and T1 General returns, then qualify you on the net income you reported after business expenses.
That last part is where the trouble usually starts. A good accountant spends the year lowering your taxable income through legitimate write-offs. A lender reads the same return and sees a smaller number to lend against. Someone billing $180,000 who writes down to $85,000 on paper is treated as an $85,000 earner. The strategy that saved you tax in April quietly limits what you can borrow.
Beyond the Notices of Assessment and T1s, expect to hand over a T2125 if you operate as a sole proprietor, or two years of business financial statements if you are incorporated. Lenders also ask for business registration or licensing paperwork, several months of personal and business bank statements, and confirmation that you have no outstanding balance with the Canada Revenue Agency. Unpaid taxes can sink an application on their own.
Once income is established, the math follows the same path as any other file. Your reported earnings run through the GDS and TDS ratios that cap how much of your income can go to housing and total debt. You also have to clear the mortgage stress test, which qualifies you at a rate higher than the one you will actually pay. Two years of steady, verifiable income makes all of it easier.
If the numbers do not work at a bank
Alternative lenders, often called B lenders, take a different view. They look at bank statement deposits, add certain deductions back into your income, and accept a story a major bank cannot. The cost is real. Rates run higher, fees are common, and you need a larger down payment. Many self-employed buyers use a B lender for one term, build a longer filing history, then move to a bank at renewal.
Timing helps more than anything else. If you know you want to buy in two years, talk to an accountant and a mortgage broker at the same time, because declaring more income now costs you tax but buys you borrowing power later. Getting pre-approved early is also worth more to a business owner than to a salaried buyer, since it surfaces documentation gaps while you still have time to fix them.
Related reading: What Are GDS and TDS Ratios in a Canadian Mortgage?, Mortgage Stress Test in Canada: How It Works, and Should You Get Pre-Approved Before Looking at Homes?
