Self-Employed Mortgage

Bank-Alternative ("B") Mortgage Solutions for Real People in Ontario

Self-Employed Income looks low on paper?

Getting a mortgage when you are self-employed can be difficult, even if your business is doing well.

Most banks in Canada look at your taxable income, not your real cash flow. Many business owners write off expenses to reduce taxes. While this helps at tax time, it can make your income look too low to qualify for a mortgage.

Because of this, many self-employed borrowers are declined by banks.

The good news is that there are Mortgage Solutions through Alternative B Lenders that look at your full financial picture, not just your tax return.

In most cases, you will need at least 20% down payment or 20% equity.

Who is this for

Self-employed for at least 1 year
Business owners and incorporated professionals
Contractors and commission earners
People with strong income but lower reported income
Entrepreneurs who reinvest in their business

Why Banks Decline Self Employed Mortgages

Banks follow strict rules that do not always reflect real life.

They usually:

* Use only your taxable income

* Require 2 years of consistent income

* Apply strict debt limits

* Do not consider business cash flow

Even if your business is strong, you may still be declined.

How Alternative B Lenders Help Self-Employed Borrowers

Unlike traditional banks, alternative lenders use a common-sense approach when qualifying self-employed individuals

Alternative Lenders:

* Analyze your 12-months bank statements to support your business cashflow

* Are more flexible with individuals who have only been self-employed for a year but have long-term industry experience

* Can use longer amortization to lower monthly payments to qualify (some up to 40-years)

Bank vs Alternative B Lenders vs Private Lenders

It helps to understand your options.

Banks:

* Lowest rates

* Very strict rules

Alternative B Lenders:

* More flexible Mortgage Solutions

* Easier approval for self-employed

* Require 20% down

* Slightly higher rates

Private Lenders:

* Very high rates

* Short-term only

Many self-employed borrowers choose Alternative B Lenders because they offer a balance between approval, cost and save them on paying higher personal income taxes.

Real Example

A self-employed contractor in Ontario earned about $130,000 per year in revenue, but after expenses, their tax income showed only $60,000.

They were declined by their bank because their income looked too low.

With a Mortgage Solution through an Alternative B Lender:

* Income was supported by 12-months business bank statements to support cashflow

* The client used a 20% down payment

* They were approved and able to purchase their home

Long-Term Plan

This Mortgage Solution is often a step forward.

Over time, you can:

* Improve income reporting (you can compare mortgage interest vs cost of higher declared income)

* Build stronger credit

* Exit strategy, move to a traditional bank mortgage (if it's beneficial)

Commons Mistakes to Avoid

Only going to banks or brokers who do not specialize in self-employed clients
Not planning income properly (consult your broker before filing your income taxes)
Going to private lenders too quickly
Focusing only on rate instead of approval

Why work with a Mortgage Broker who specializes with Self-Employed clients

A broker who specializes in self-employed mortgages:

* Is familiar with alternative lending products geared towards the self-employed

* Can run some figures before you file your income taxes, to weigh out overall income tax vs mortgage interest savings

* Understands self-employed expenses; which incomes can be 'grossed-up' or added-back to help you qualify

* Help you plan long-term strategy

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Frequently Asked Questions

What’s the benefit of using a mortgage broker instead of going to my bank?

Banks can only offer their own rules, products, and rates. As brokers, we work with 50+ lenders —so we can shop around for the option that fits your situation, not just one bank’s box.

Why choose Mortgage Wars?

We specialize in non-traditional/Alternative “B” lending. Over the years, we’ve built strong relationships with alternative (and private) lenders and a deep understanding of their products and guidelines. That lets us structure your file the way lenders want to see it—turning real-world situations into real approvals.

What’s the difference between Prime (A), Alternative (B), and Private mortgages?

Prime (A): Bank-type mortgages for people with verifiable income and clean credit.

Alternative (B): For good borrowers who don’t quite fit bank rules—often self-employed or recovering from past credit issues.

Private: Funded by Mortgage Investment Corporations (MICs) and private investors with flexible guidelines—used when A or B won’t work; rates and fees are higher because risk is higher.

Do I really need 20% down or equity for “Alternative (B) Solutions”?

Yes. For purchases you’ll need at least 20% down; for refinances/debt consolidation/equity take-outs you’ll need at least 20% home equity. If you’re unsure where you stand, ask—we’ll run the numbers with you. Reverse Mortgages have higher requirements.

What rate will I get with an Alternative (B) Lender?

Alternative (“B”) rates are based on your full profile—property, equity, income, credit, and purpose. They’re typically around 1% above big-bank rates and well below Private. Reverse mortgages are around 2% higher than regular rates. We’ll shop lenders and present a clear written commitment with your rate, terms, conditions, and all fees so you can decide with confidence—no surprises.

What fees should I expect?

Prime (A) deals: No Broker Fee (lender pays us).

Alternative (B) deals: Expect a 1.0% Lender fee and we charge a flat Broker Fee of $1500 . Other brokers who specialize in Alternative Lending charge on average a 1.0% Broker Fee. Reverse Mortgages have NO Lender/ Broker Fee.

Private deals: Start around 2.0% Lender fees. We charge a flat Broker Fee of $3000, regardless of the size of the mortgage.
*** You’ll also have standard third-party costs like the appraisal and legal fees. We’ll disclose everything up front before you decide.

How fast can I get approved?

Once we submit a complete application, approvals often come back within 24–48 hours. Complex files can take longer, but we’ll set expectations right away.

What is the application process?

Step 1 — Strategy Call
We book a quick virtual strategy call to understand your goals, timeline, property details, and any constraints. We’ll outline the best path and what lenders will look for.

Step 2 — Application & Documents
After the call, we send a secure online application. You submit it and e-sign consent so we can review credit and share information with lenders as needed. You’ll also upload the initial documents (ID, income documents, proof of down payment, and—if refinancing—your mortgage statement/property tax). We’ll give you a simple checklist.

Step 3 — Approval & Appraisal (if required)
We shop lenders and obtain a written commitment outlining rate, term, payment, and conditions. We review it together and, if you’re happy, you e-sign to proceed. If an appraisal is required, we order it at this stage and handle any lender follow-ups.

Step 4 — Lawyer & Funding
The lender instructs an approved real-estate lawyer of your choice. You sign the final mortgage documents (in-office or virtually, where available) and funds are released on completion.