The documents depend on how your business is set up
- Sole proprietor or partnership
- Personal tax returns, business income and expenses and notices of assessment help explain net income.
- Incorporated business
- Corporate financial statements and evidence of salary or dividends distinguish business finances from personal income.
- Contract income
- Contracts, their duration, renewals and payments received can document income continuity. A contract does not guarantee that a lender will count its full value.
Source: CMHC — Self-employed borrowers ↗
Business revenue and qualifying income aren’t the same
Business revenue is the company’s sales or fees. Reported income reflects expenses and tax structure. Income used to qualify comes from the lender’s review and permitted adjustments; it does not automatically equal either of the first two figures.
Fictional example · No qualifying income assumed
- Sole-proprietor business revenue
- $150,000
- Business expenses
- $60,000
- Illustrative net income
- $90,000
This calculation does not mean a mortgage will be assessed using $150,000 or $90,000 of income. Recurring earnings, tax returns, debts and lender rules still need review.
For a corporation, retained earnings are not automatically available personal income. Permitted adjustments differ between programs.
Which documents might a lender ask for?
- T1 returns, business schedules and notices of assessment: reconcile reported and assessed income.
- Corporate statements and returns, where applicable: review operations, expenses, debts and compensation.
- Business bank statements and contracts: understand payments received and upcoming work.
- Registration or incorporation documents: confirm structure and time in business.
- Down-payment evidence and personal debts: complete the financial picture.
Many lenders request a two-year history, but that is not a universal rule. CMHC recommends 24 months in business or experience in the same field, with flexibility depending on the application. I will clarify the required periods and documents before you send them.
Variable income or a newer business
Be ready to explain changes from one year to the next, such as seasonal work, a new contract or a temporary drop in income. If your business is newer, relevant experience and contracts can help explain your situation, but they don’t guarantee approval.
Compare the fees, rates, mortgage terms, penalties and down-payment requirements for each option. Start early, and involve your accountant if anything in the tax documents needs explaining.
Buying your first home? Review the first-home steps. The payment calculator lets you test an amount and a rate; it does not determine the income a lender will accept.
Let’s talk about your business and mortgage plans.
We’ll discuss how your business is set up, your income and the documents that could support your application. The lender sets the lending criteria and makes the final approval decision.
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