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Today’s Mortgage Rates updated as of December 21, 2024 3:57 am

For a property located in

5-year fixed*

4.04

5-year Variable*

4.25

(Prime -1.15%)

*Insured loans. Other conditions apply. Rate in effect as of today.

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Tailored Mortgage Solutions for Self-Employed Canadians

Being self-employed offers unparalleled freedom, but it can sometimes make securing a mortgage challenging. At Citadel Mortgages, we specialize in providing mortgage solutions designed for self-employed Canadians, ensuring that your unique financial situation doesn’t stand in the way of homeownership.

Whether you’re a first-time homebuyer, refinancing, or renewing your mortgage, understanding current trends and available options helps you make informed financial decisions.

This guide focuses on helping you navigate the Canadian mortgage market, offering insights into current rates, strategies for securing the best deal, and regional trends.

Mortgage brokers play a pivotal role in helping Canadians find tailored financing options, providing expert advice, and navigating the often complex mortgage market.

For more detailed information on mortgage types, costs, and rights, consult the Government of Canada – Financial Consumer Agency of Canada (FCAC).

What is a Self-Employed Mortgage?

A self-employed mortgage is tailored to individuals who earn income outside traditional employment structures. This includes entrepreneurs, small business owners, freelancers, and contractors. These mortgages consider non-traditional income sources and often feature flexible qualification requirements.


Challenges for Self-Employed Borrowers

  1. Irregular Income

    • Income may fluctuate month-to-month or seasonally.
  2. Limited Traditional Documentation

    • Business owners often lack T4 slips and rely on tax returns or financial statements.
  3. Tax Deductions

    • While tax write-offs reduce taxable income, they can also affect how much income lenders recognize.
  4. Perceived Risk

    • Lenders may view self-employed applicants as higher risk, leading to stricter qualification requirements.

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Challenges for Self-Employed Borrowers

  1. Irregular Income

    • Income may fluctuate month-to-month or seasonally.
  2. Limited Traditional Documentation

    • Business owners often lack T4 slips and rely on tax returns or financial statements.
  3. Tax Deductions

    • While tax write-offs reduce taxable income, they can also affect how much income lenders recognize.
  4. Perceived Risk

    • Lenders may view self-employed applicants as higher risk, leading to stricter qualification requirements.

You Need The Following To Get Started : Sole Proprietorship & Partnerships:

Sole Proprietorship & Partnerships:

  • Business License
  • 6 Months Bank Statements
  • Void Check
  • 2 Piece Of ID
  • Any Net worth Documents (if applicable)

Corporations:

  • Articles Of Incorporation
  • 6 Months Bank Statements
  • Void Check
  • 2 Piece Of ID
  • Any Net worth Documents (if applicable)

Keep In Mind The Following May Be Required:

  • May Need A Larger Down Payment
  • May Need A Co-signer

How Stricter Lending Rules Affect Self-Employed Canadians

In addition to reducing the amortization period and raising the minimum down payment required to purchase a home, in 2014, the Canadian Mortgage and Housing Corporation (CMHC) discontinued mortgages for those who are self-employed without third-party validation. Before that, self-employed Canadians and contractors only had to state their income. But not anymore.

This made the homeownership dream for hundreds of thousands of Canadians more difficult. That’s because 2.76 million Canadians are self-employed; a whopping 15% of the country. Moreover, more and more Canadians step into the ranks of the self-employed every year.

Unfortunately, big banks don’t help entrepreneurs and view them as risky. Because you are a self-employed entrepreneur and might draw a smaller income for tax purposes, the banks think there’s a higher chance that you’ll default on your mortgage.

At Citadel Mortgages, we pride ourselves in being experts when it comes to arranging self-employed mortgages because we are self-employed just like you. If you are a Self-employed, we have a mortgage solution for you.

Eligibility for Self-Employed Mortgages

To qualify for a self-employed mortgage, you’ll typically need:

  1. Proof of Income

    • Tax returns, NOAs, or bank statements from the last 6-12 months.
  2. Good Credit History

    • A credit score of 650 or higher is recommended for the best rates.
  3. Down Payment

    • Most mortgage options for self employed will require high donw payments.
  4. Business Verification

    • Incorporation documents, GST/HST number, or a business license.

FAQs About Self-Employed Mortgages

Can I qualify for a mortgage with irregular income?

Yes! Lenders often consider bank statements, invoices, or contracts in place of traditional income proof.

The amount depends on your credit score, income documentation, and down payment size.

Are the interest rates higher for self-employed mortgages?

Final Thoughts - Self-Employed Mortgages

Securing a mortgage as a self-employed individual doesn’t have to be difficult. At Citadel Mortgages, we simplify the process by offering personalized solutions and flexible options that fit your unique financial situation. Let us help you turn your dream of homeownership into a reality.

At Citadel Mortgages, we specialize in helping Canadians navigate the complexities of mortgage rates and terms. Whether you’re looking for a 6-month fixed rate, a 5-year variable, or something in between, our team is here to provide personalized guidance and access to the best rates in Canada.

Contact Citadel Mortgages today for expert advice.