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How to refinance and make your mortgage work harder
Lower your rate, consolidate debt, or unlock equity—without guessing. This guide breaks down when refinancing makes sense (and when it doesn’t).
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1. Get clear on your income story
Lenders usually look at your last two years of income (based on your tax returns). If your income fluctuates or you write off a lot of expenses, it’s important to understand what you’ll actually “qualify” on before you apply.
2. Organize your documents
Most lenders will ask for:
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Two years of T1 Generals
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Two years of Notices of Assessment
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Business financials (if incorporated)
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6-12 months of business bank statements
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Confirmation that HST/Source Deductions are current
Having this ready speeds everything up.
3. Check your credit
A strong credit score makes a big difference. Pay down revolving debt, avoid missed payments, and don’t take on new credit right before applying.
4. Plan your down payment
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5% minimum may work if you have solid tax-reported income
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10-20%+ is often required if you’re using stated income or can’t provide full documentation
How to strengthen your self-employed mortgage application
Trim your debt
Pay down credit cards, loans, and lines of credit before applying. A lower debt load makes your application stronger and your numbers cleaner.
Keep cash in the bank
Strong reserves show lenders you can handle slower months without missing a payment. Stability matters when income isn’t fixed.
Protect your credit
Pay everything on time and keep balances low. A solid credit score can mean better rates and options.
Separate your finances
Keeping clear business and personal accounts makes it easier to show what you actually earn and prove your income story with confidence.
Your “how to get approved” guide
Consider this your cheat sheet on what to gather, what to expect, and how to make the mortgage approval process feel simple.
*Lenders pay us, not you. So, you get expert guidance and more options at no extra cost.
Frequently asked questions about mortgages when self-employed
Some of the reasons include:
Income is less predictable
Unlike salaried employees with steady T4 income, self-employed earnings can fluctuate month to month or year to year. Lenders see variability as higher risk.
Income is reduced on paper
Many business owners legally minimize taxes through write-offs. The downside? Your net income on your tax return may look much lower than what you actually take home, and that’s the number many lenders use to qualify you.
Extra documentation requiredLenders typically ask for additional paperwork to confirm income stability, which can make the process more detailed than a traditional salaried application.
Credit matters moreA strong credit profile is essential. Irregular income patterns can sometimes affect cash flow and, in turn, how lenders assess your overall stability.
Most lenders want to see at least two years of self-employment history. Some alternative lenders may consider one year, depending on your industry and overall profile.
If your taxable income looks low because of write-offs, it can reduce how much you qualify for. In that case, “stated income” or alternative programs may be options, often requiring a larger down payment.
Not always. If your income is well documented and strong, you may qualify with as little as 5% down. If using stated income or alternative lending, you may need 10–20% down.
If you qualify under standard guidelines, your rate can be similar to salaried borrowers. If you need alternative or stated income programs, rates may be slightly higher.
Generally, 680+ gives you access to the best options. Lower scores may still qualify but could limit lender choices or increase costs.
Mortgages for self-employed borrowers
Variable income doesn’t have to mean complicated. Our Mortgage Experts are here to help you every step of the way.
