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What Is Self-Employed Mortgage In Canada?


Find out everything you need to know about self-employed mortgage from this blog. Read on to find out more.

Self employed mortgage in Canada

Source: Freepik

Are you self-employed and looking for a mortgage to purchase your home?

According to Statistics Canada, around 2.9 million Canadians were self-employed in 2018. And, given the present pandemic situation, that number could have risen. The number of self-employed people is growing for many reasons, including flexible work hours, unlimited growth potential, and several tax rewards.

Although the size of self-employed people is increasing rapidly, the difficulty in getting a mortgage remains the same.

Let us understand self-employed mortgages and how they function if you are a self-employed individual.

What is a self-employed mortgage?

A self-employed mortgage is a loan provided to a self-employed person.

It is a type of loan designed for self-employed, small-business owners, or otherwise deemed to have insufficient income supporting the purchase of a home. You can get a self-employed mortgage from banks or private lenders.

How can you get a self-employed mortgage?

Apart from private lenders, many crown companies also provide self-employed mortgages to assist you in purchasing your dream home. It is up to a lender to determine what factors they consider when approving a mortgage. But some of the most important things you can do to boost your chances of getting a mortgage are below.

  • Create and show a record of accomplishment of your self-employment.
  • Make a substantial down payment on the house and gain the lender’s confidence in you.
  • Do have a significant cash reserve as your emergency fund.
  • Pay any debts off your credit cards.

What are the required documents for getting a self-employed mortgage?

You need to list some papers that may be required to be evaluated besides your Notices of Assessment below:

  • Financial statements of your business and any other income going into your account.
  • Proof that you pay your taxes consistently.
  • A copy of your business license.
  • Your personal and business credit score.
  • Documents showing your expected income in the future.
  • A credit check if asked by the lender.
  • Documents proving you are the rightful owner of your business.

The lender may also request additional documents depending on the requirements.

Source: Freepik

What are the pros and cons of a self-employed mortgage?


1. Accessibility and availability:

Self-employed mortgages have a faster application process, and many lenders will lend you money if you have all the documentation.

2. You can invest in the house you want to buy:

With the availability of a self-employed mortgage, you can buy your dream house easily.


1. Interest rate:

Self-employed mortgages have an extremely high interest rate apart from the lender’s fees.

2. Attaining all documents:

For a mortgage to be approved, you need to have all the documents ready. Unless you have those, your mortgage will not even start.

3. Poor credit score:

If lenders reject you, your credit score may get damaged due to too many credit inquiries.

So now you know what a self-employed mortgage is and how to apply for one if you work for yourself. If you want to find out how to apply for a mortgage, read ‘Step by Step Guide to Applying for Mortgage.’ 


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