Canadian Self-Employed Mortgage Calculator
Calculate your qualifying income and maximum mortgage as a self-employed borrower in Canada. Uses T1 net income (Line 15000), 2-year average, add-back adjustments, and BFS stated income programs. OSFI stress test included. All figures in CAD.
Lenders use different methods to calculate qualifying income for self-employed borrowers. The traditional method uses net income from your T1 (after expenses). BFS stated income programs may use a percentage of gross revenue. Choose the method that gives you the best qualifying income.
| Method | Qualifying Income | Max Loan (4.5×) | Available From | Notes |
|---|---|---|---|---|
| Conservative (lower year) | CA$95,000 | CA$422,409 | All A-lenders | Most conservative — used by banks |
| 2-Year Average | CA$102,500 | CA$455,757 | Most A-lenders | Better if income is growing |
| Gross Revenue BFS (50%) | CA$90,000 | CA$405,000 | B-lenders / specialist | Higher rate (+0.5-1%), requires lower LTV |
Business For Self (BFS) stated income programs allow self-employed borrowers to state their income without traditional T1 documentation, in exchange for a lower maximum LTV (typically 50-65%) and a higher interest rate premium.
How to Use This Self-Employed Mortgage Calculator
Enter your net business income for the last two years (from Line 15000 of your T1 General return), your years in business, business structure, and target home price and down payment. The calculator shows your qualifying income, maximum mortgage amount, and whether your loan request passes the OSFI stress test. Figures in CAD.
How Lenders Calculate Self-Employed Income
Most A-lenders use the lower of your two most recent years of net business income, or the 2-year average. Some lenders allow add-backs for non-cash expenses (CCA/depreciation, home office deduction) and one-time costs to increase your qualifying income. B-lenders may offer stated income Business For Self (BFS) programs for lower LTV purchases.
Key Self-Employed Mortgage Requirements
Standard requirements: minimum 2 years self-employment history, 2 years of T1 returns and Notices of Assessment, proof of business registration (GST/HST number or business license), and bank statements. Incorporated borrowers additionally need 2 years of corporate financial statements and T2 returns.
Self-Employed Qualifying Income Formula
Qualifying Income = Lower of Year 1 or Year 2 net income (Line 15000)
Method 2 — Average:
Qualifying Income = (Year 1 + Year 2) / 2
With Add-Backs:
Qualifying Income = Net Income + CCA + Home Office + One-Time Expenses
Maximum Loan ≈ min(Qualifying Income × 4.5, Stress Test Max)
Stress Test: qualify at max(rate + 2%, 5.25%) with GDS ≤ 39%
Example: Freelance Consultant Qualifying for a Mortgage
David — Sole Proprietor, 4 Years in Business, Buying in Toronto
| Year 1 net income (Line 15000) | $88,000 |
| Year 2 net income (Line 15000) | $102,000 |
| Conservative qualifying income | $88,000 (lower year) |
| CCA add-back | $7,500 |
| Adjusted qualifying income | $95,500 |
| Max loan (4.5×, stress tested) | ~$380,000 |
| Home price target | $700,000 |
| Required down payment (20%) | $140,000 |
| Loan required | $560,000 — over limit |
| Solution | Increase down payment to 46%+ or increase income documentation |
David's CCA add-back increases his qualifying income by $7,500, boosting his maximum loan by approximately $30,000. However, to purchase a $700K property he still needs a substantial down payment. Using the 2-year average income ($95,000) with the add-back gives him a higher maximum loan, bringing the required down payment to a more manageable level.