Shopping for Mortgage Rates When You're Self-Employed
Nerdy takeaways
Non-traditional income is harder to verify, which can make some lenders reluctant to work with you.
Finding a lender that's equipped to work with self-employed borrowers is a must.
Proper income documentation is key to approval: you'll need 2 years of tax forms and bank statements, at a minimum.
Yes, you can get a mortgage without a T4
✋ Raise your hand if any of the following apply to you:
You run a small business.
You're a freelancer or contractor.
You work on commission.
You want a mortgage lender who gets how your income works — no judgment.
Hand in the air right now? You’re in the right place.
🧐 Why mortgage lenders are skeptical of self-employed borrowers
Maybe you've heard stories about folks being rejected by a big bank, or pre-approved for way less than they expected.
And it's true, many banks prefer to work with borrowers who earn traditional income (a.k.a. they're paid by a traditional employer on a regular cadence). Lenders love predictability.
To a lender, non-traditional income is less predictable. So they cover their bases.
When evaluating a borrower who earns non-traditional income (a.k.a. you), lenders may ask uncomfortable questions and require lots of documentation. If they can't verify the stability of your income, they may quote you a higher interest rate or reject the application altogether.
💯 The truth about self-employed mortgages
Being self-employed doesn't mean you're unqualified — it just means you'll have to jump through a few extra hoops.
There's nothing wrong with non-traditional income. You're not necessarily a risky borrower just because you lack a T4.
There most definitely are mortgage lenders out there that are equipped to work with you.
You just have to know where to find those lenders, and how to show them the full picture of your financial situation.
That's where we can help.
🤷♀️ Not sure if you're ready for a mortgage?
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What lenders want to see (and why it’s different for you)
Here's what you need to know about mortgage lenders: they hate risk and use strict mortgage qualification criteria to help them mitigate it.
Every step of the mortgage application process is designed to help the lender evaluate how likely you are to repay the loan.
A stable and sufficient income is key to staying current on a mortgage, so that’s one of the first things lenders want to verify.
Traditional employment makes income verification easier for lenders, which is why they like it. A T4 slip is a tidy little form that lets them see how much you earn; several years of T4s shows whether that income has been steady.
When you’re self-employed, your income may come from multiple sources instead of just one. Or it may fluctuate throughout the course of a year.
Lenders may interpret this lack of predictability as a risk, so they'll ask for extra documentation to understand your financial situation.
Here’s what you’ll need to show your income is stable and sufficient.
Documents self-employed borrowers may need to provide:
📑 Tax documents (at least 2 years)
These could include:
Notice of assessment.
T1 general tax forms.
GST/HST tax forms.
🗂️ Proof of business
This could include:
Business license.
Articles of incorporation.
GST/HST registration.
💰 Business financial statements (1-2 years)
This could include:
Profit and loss statements.
Contracts, invoices, client referrals.
Copy of your business plan or evidence of a sustainable business model.
🏦 Bank statements (3-6 months)
This could include:
Evidence of deposits and transactions for both business and personal accounts.
⚖️ Assets and liabilities (personal and business)
This could include:
Evidence of any savings or investment accounts.
Details of any debts or monthly expense obligations.
More Nerdy Perspective
"Organizing your documentation can have a big impact on how smoothly a mortgage application goes for you. It's best to start collecting these docs long before you plan to formally apply. Digitizing them, if you haven’t already, will make delivering them to your loan officer easy. And if you feel unsure at any point, your accountant, tax professional or financial advisor should be able to lend a hand."
Ready to shop? Compare offers from lenders that work with self-employed buyers
The table below features current mortgage rate offers from Canadian lenders who are known to work with self-employed borrowers.
Keep in mind, these rates are just a sampling of what they may be able to offer.
If you want an offer that's personalized to your financial situation, click the 'explore quote' button. Then, answer a few quick questions about yourself and the mortgage you're looking for.
At the end, you'll submit your info and a mortgage broker will get in touch to continue the process directly.
Not ready to pick a rate yet? Talking with a mortgage broker might help.
8Twelve has partnered with over 65 Canadian mortgage lenders to provide competitive rates on over 7,000 mortgage products. 8Twelve can quickly match you with a lender and mortgage type that meets your needs — even if your financial situation is unique.
Frequently asked questions
Do any banks work with freelancers?
Do any banks work with freelancers?
Yes, many mainstream banks like TD Bank, Scotiabank and BMO work with self-employed applicants, including freelancers. However, they typically require additional documentation to verify income.
Alternative and B‑lenders, such as Home Trust or Equitable Bank, also work with mortgage borrowers who freelance, and their documentation requirements may be more flexible.
I don’t have a T4 — what do I need to qualify?
I don’t have a T4 — what do I need to qualify?
If you don't have a T4, lenders require alternative documentation to demonstrate stable income and solid financial standing.
These documents may include: Notices of assessment (NOAs), T1 general tax returns, business documentation and bank statements.
Do I need to be self-employed for a certain number of years?
Do I need to be self-employed for a certain number of years?
Most lenders in Canada want to see at least two years of self-employment history to assess the stability and sustainability of your income.
Will I pay a higher rate than salaried applicants?
Will I pay a higher rate than salaried applicants?
Possibly — rate differences typically depend on the type of lender, your documentation, and your overall financial profile.
Do I have to go through a broker?
Do I have to go through a broker?
No, you don't have to use a broker — but working with one can be especially helpful for self-employed borrowers. Brokers often know which lenders are more flexible in recognizing non-traditional income and can streamline the application process.
What if I just incorporated this year?
What if I just incorporated this year?
Congratulations on your baby business! Even though your business is less than a year old, you may still qualify for a mortgage, but you’ll need to provide alternative proof of income and business stability since most lenders want to see at least two years of self-employment history.
What kind of paperwork do I need as a sole proprietor?
What kind of paperwork do I need as a sole proprietor?
Since lenders won't be able to rely on T4s or traditional employment records, you’ll need comprehensive documentation to demonstrate stable income and the legitimacy of your business. Commonly required documents include:
2 years of personal T1 tax returns.
2 years of NOAs.
Business bank statements to show income flow.
Contracts and/or client invoices.
DIVE EVEN DEEPER
Clay Jarvis
