🏡 How to Get a Mortgage With Irregular Income or Low Taxable Income in Canada

If you're self-employed in Canada, you already know the benefits of business ownership — freedom, flexibility, and financial potential. But when it comes to getting a mortgage, those same freedoms can make life… complicated.

One of the biggest hurdles? Low taxable income due to deductions.

Traditional lenders — like big banks — typically want to see stable, predictable income reported over two years. But for many business owners, contractors, freelancers, and consultants, that's just not reality.

So, how can you qualify for a mortgage when your income is inconsistent or doesn’t look impressive on paper?

The answer often lies in alternative lending.

Let’s break it down.

💡 The Problem With Traditional Mortgage Approvals

When you apply for a mortgage through an "A lender" (major banks or credit unions), here’s what they’ll likely ask for:

• 2 years of T1 General tax returns

• 2 years of CRA Notices of Assessment

• Business financial statements

• Proof of income stability

But what happens if you:

• Write off expenses to reduce taxes (resulting in low net income)?

• Have seasonal or project-based work?

• Just started your business and don’t have two full tax years yet?

In those cases, your file may get rejected — not because you can’t afford a mortgage, but because your income doesn’t fit their strict criteria.

🔄 Enter: Alternative Lenders (Your Mortgage Ally)

Alternative lenders, also known as “B lenders” or non-prime lenders, specialize in non-traditional borrowers. That includes:

• Self-employed professionals with fluctuating income

• Borrowers with low declared income but strong cash flow

• Individuals with past credit challenges or recent business launches

These lenders look at your file differently. Rather than focus solely on tax returns, they might consider:

✅ Bank statements (to show real income flow)

✅ Gross income before deductions

✅ Contracts or invoices from clients

✅ Asset strength and equity

✅ Credit history (even if not perfect)

This flexibility makes alternative lenders a powerful option if you're self-employed and don’t fit inside the traditional box.

💳 What Do Alternative Lenders Expect?

While alternative lenders are more lenient, they still want to manage risk. Here’s what you’ll typically need:

• Higher Down Payment: Usually 20%+ (though there are exceptions)

• Proof of Self-Employment: Business license, GST number, or incorporation docs

• Bank Statements: 6–12 months showing business deposits

• Credit Report: A decent credit score helps, but some lenders work with bruised credit too

📝 Pro Tip: Even if your reported taxable income is low, a healthy flow of deposits into your business or personal accounts can support your application.

💼 Real Life Example: Jim, the AV Consultant

Let’s say Jim is a freelance AV consultant in Burnaby who brings in about $15,000/month. But after business deductions, his taxes show just $50,000/year in net income.

A big bank sees this and says: ❌ "Not enough income."

But an alternative lender — working through a mortgage broker like Dennis Eng — looks at Jim's bank deposits, contracts, and credit history. They approve him for a $750,000 mortgage with a slightly higher interest rate — but it gets him into the home he wants.

Result? ✅ Happy homeowner.

💬 Should You Be Worried About Higher Rates?

Yes, rates with alternative lenders are usually higher than those with banks — but it’s not forever.

Many clients use an alternative mortgage as a stepping stone:

1. Get approved and into the home.

2. Build credit or stabilize income.

3. Refinance with a traditional lender after 1–2 years.

4. With the right strategy, you can move from B lender to A lender and save in the long term.

🛠️ How a Mortgage Broker Can Help

Working with a mortgage broker who understands self-employed challenges makes a massive difference.

At MortgagesbyDennisEng, we help business owners:

• Package their income in a way lenders understand

• Access exclusive deals with trusted B lenders

• Avoid costly rejections and wasted time

• Plan ahead for future refinancing

📈 Ready to Explore Your Options?

If you’ve been told “no” by the bank, it doesn’t mean homeownership is out of reach.

With the right guidance and the right lender, you can absolutely get approved — even with low income.

👉 Book a free consultation with Dennis Eng today and let’s build a mortgage strategy that fits your business and lifestyle.