Stated Income Mortgages in Ontario

A conventional mortgage requires verified income: your lender pulls your last 2–3 years of tax returns, analyzes your net income, and calculates your borrowing capacity based on that documented earnings history.

A stated income mortgage flips the burden. Instead of proving income through tax documents, you declare your annual income on the application. The lender still verifies that you're employed or self-employed, but they rely on your word for the dollar amount rather than historical tax data. This makes it particularly valuable if you're in year one of a new business or if your recent income is higher than your last filed tax return.

Not quite without documentation—but the documentation is very different. You'll typically need:

• Business registration or incorporation docs (if self-employed)
• Recent invoices or contracts showing client work
• Bank statements (3–6 months) showing deposits into your account
• Employment letter confirming self-employment status (if applicable)
• Trade association membership or professional credentials (optional, but helpful)

The key is that lenders verify you actually work in your stated field and that money is flowing in—without requiring a 2–3 year income history.

This is the ideal use case. You filed your 2024 tax return showing $80,000, but in 2025 you actually earned $120,000. A conventional lender will mortgage you based on that $80,000. A stated income lender will consider your current $120,000 income if you can show bank deposits and contracts to back it up.

If growth is recent and consistent, you have a strong application for stated income. Just be prepared to document the jump—show your recent invoices and bank deposits from 2026 year-to-date.

Conventional lenders typically want a full 2 years of tax returns (or at minimum 1 year plus a CPA-prepared financial statement for year 2). If you're in month 18 of your business, you're stuck.

Stated income mortgages are built for exactly this scenario. You state your income based on year-to-date earnings or a 12-month rolling average, back it up with bank statements and invoices, and move forward. Many first-time business owner mortgages are approved via the stated income route.

It depends on the score. Most stated income lenders require a minimum credit score of 650–680. If you're below 650, you'll likely need to explore bad credit mortgage options instead, which carry higher rates and stricter conditions.

That said, if your score is in the 650–700 range and your income is solid, stated income mortgages can work. The lender's focus is on whether you can currently service the debt, not your perfect payment history from five years ago.

Stated income mortgages typically carry a 0.50% to 1.25% rate premium over conventional mortgages. The exact spread depends on:

• Your credit score
• Your down payment size (15% vs. 20% vs. 25%)
• How recently you started your business
• The stability and consistency of your income
• Your debt-to-income ratio

On a $400,000 mortgage, a 0.75% premium adds roughly $3,000 per year in interest. Over a 25-year amortization, that's material—but still far cheaper than alternative lenders.

As of May 2026, stated income mortgages in Ontario range from approximately prime + 0.25% to prime + 1.50%, depending on your profile.

If prime is currently 4.45%, you might qualify for:

• Strong profile (20%+ down, 750+ credit, stable 3+ year business): 4.70%–4.95%
• Mid-range (15% down, 700 credit, 1–2 years in business): 4.95%–5.45%
• Riskier profile (15% down, 650–680 credit, year 1 business): 5.45%–5.95%

These rates change weekly. Contact me for a current quote based on your specific situation.

Core documents:

• Completed mortgage application with stated annual income
• Last 6–12 months of business bank statements
• Proof of business registration or incorporation
• 2–3 recent invoices or contracts showing client work
• Recent business tax number (BN) confirmation from CRA
• Personal credit report authorization
• Proof of identity and residence

Optional but helpful:

• A letter from your accountant confirming current business income
• Professional credentials or awards in your field
• Multi-year average income (if it shows upward trend)

With complete documentation, most stated income mortgages close in 5–7 business days. This is slightly longer than conventional mortgages (which close in 3–5 days) because the lender needs extra time to verify your self-employment status and income claims.

Delays typically happen when documentation is incomplete (missing invoices, outdated business registration, insufficient bank statements). To stay on track, gather everything upfront and submit a complete package.

Lenders typically use one of two methods:

• 12-month average: Add up your last 12 months of deposits and divide by 12. This smooths out seasonal variation.
• Trailing 6-month average: If your income is trending upward, the lender may use your most recent 6 months, then annualize it.

The key is showing consistent deposits into your account. Sporadic deposits or long gaps hurt your application. If you have a $5,000 month followed by two $500 months, your 12-month average won't look strong—but if you show a clear upward trend from March to May 2026, lenders will notice and may weight the recent months more heavily.

Yes, but you have an advantage: you can often get a letter from your broker or manager confirming your employment and commission structure. This extra verification makes you a stronger applicant than pure self-employed borrowers.

Bring 6 months of pay stubs (or commission statements) showing your earnings, plus an employment letter confirming your role and income expectation. If your income is documented in payroll records, you may actually qualify for a semi-conventional product that's cheaper than full stated income.

Document each stream separately. For each income source, provide:

• Bank account deposits tied to that income
• Contracts or agreements (consulting retainers, freelance platforms showing earnings, lease agreements for rentals)
• A brief description of each income source

Lenders add up qualifying income from all sources. This can work in your favor—multiple streams show diversification and reduce perceived risk. Just make sure each stream is verifiable and consistent.

No lender will approve a stated income mortgage without verification. The "stated" part refers to the lack of historical tax documentation, not a lack of scrutiny. Lenders will:

• Review 6 months of bank statements
• Check your CRA business registration
• Call your accountant or business contact if needed
• Verify deposits match your stated income claims

If your bank statements show $30,000 in quarterly deposits but you claim $200,000 annual income, the application will be declined. Stated income only works if your recent deposits support your stated amount.

Yes. Down payments below 20% require mortgage default insurance (CMHC, Sagen, or Canada Guaranty). Stated income mortgages are no exception. The insurance premium gets rolled into your mortgage amount, increasing your total debt and monthly payment by roughly 3–4% (depending on your down payment size).