A growing number of Canadians are now business-for-self borrowers
Lenders are placing greater scrutiny on mortgage applications from self-employed Canadians, a group that makes up about 13% of the workforce, as variable income and tax deductions complicate income verification.
Mortgage broker Leah Zlatkin says showing reliable credit behavior can help offset perceived risks.
Statistics Canada reports that roughly 2.7 million Canadians were self-employed as of 2025. With lending standards tightening, many of these borrowers are finding it more difficult to qualify for competitive mortgage rates without consistent income documentation and well-prepared financial records.
Zlatkin, a licensed mortgage broker and expert with LowestRates.ca, highlighted the differences between how salaried employees and self-employed borrowers report their income and how tax strategies can affect their application.
"Self-employed Canadians often face dtricter requirements because their income can fluctuate from month to month," she said. "Unlike salaried employees who can show steady pay through T4s, self-employed borrowers typically have variable earnings and often claim legitimate deductions to reduce their taxable income.
"That's helpful at tax time, but it can make it harder to prove income consistency when applying for a mortgage."
The shift has pushed some borrowers toward alternative financing. Alpine Credits Ltd., a private home-equity lender operating for more than five decades, reports growing interest from homeowners with significant equity but limited access to conventional loans. The company focuses on home equity rather than credit score or employment type, allowing qualified borrowers to obtain funds more quickly than through traditional channels.
To improve mortgage eligibility with mainstream lenders, Zlatkin advises self-employed Canadians to focus on five essentials: maintain a credit score of at least 680 — ideally above 700 — to demonstrate creditworthiness; keep detailed financial statements, tax filings, and CRA Notices of Assessment up to date for at least two years; and prove at least two years of consistent income through business licenses or audited statements. She adds that saving for a larger down payment — 10% minimum, 20% for uninsured mortgages or homes above $1.5 million — and keeping debt ratios within accepted limits (Gross Debt Service 39% or less, Total Debt Service below 44%) can further improve approval prospects.
As traditional lenders continue to tighten documentation standards, self-employed homeowners with substantial equity are exploring other financing routes. For many, leveraging home value through alternative providers like Alpine Credits is becoming a practical response to stricter mortgage qualification rules.
