Mortgages for Self-Employed Individuals

Being self-employed comes with unique challenges, but obtaining a mortgage is absolutely possible. This guide will walk you through everything you need to know about self-employed mortgages and how to streamline the process.

How Do Banks Assess Self-Employed Income?

Lenders typically consider 50-65% of a self-employed individual’s net income when assessing mortgage eligibility. This calculation factors in expenses, taxes, and other financial obligations to determine repayment ability.

What is a Self-Employed Mortgage?

A self-employed mortgage is a loan designed specifically for business owners, freelancers, and contractors. These loans accommodate the unique financial circumstances of self-employed individuals by offering flexible qualification criteria.

To qualify for a self-employed mortgage, you’ll generally need:

A strong credit score
Proof of consistent income
A stable employment history
At least two years’ worth of business financials and tax returns to verify earnings

Required Documentation

When applying for a self-employed mortgage, lenders typically request:

Personal tax returns (last two years)
Business tax returns (last two years)
Proof of income (e.g., bank statements)
Proof of business ownership (e.g., business registration certificate)
A letter from your accountant verifying your financials

CMHC Self-Employed Program

The CMHC Self-Employed Program, offered by the Canada Mortgage and Housing Corporation (CMHC), simplifies the mortgage process for self-employed borrowers. It provides more flexible income verification options, lower down payment requirements, and access to competitive mortgage rates.

How Arise Mortgage Can Help

Traditional banks often have rigid lending criteria that don’t accurately reflect the financial situation of self-employed individuals. At Arise Mortgage, we take a different approach.

With just six months of income statements, we can annualize your earnings to give lenders a clearer picture of your true income.
If your net income appears lower due to tax deductions, we can use alternative methods to demonstrate your real earning potential.

Our team specializes in helping entrepreneurs, freelancers, and business owners secure tax-efficient mortgage solutions and gain access to profitable real estate opportunities.

Self-Employed FAQs