A stated-income mortgage approval lets a self-employed borrower qualify on a reasonable income they state — supported by proof the business exists and is active — instead of only the net income left on their tax return after write-offs. It exists because good tax planning and mortgage qualifying pull in opposite directions: every legitimate expense that lowers your taxable income also lowers the income a traditional lender can use. Stated-income programs through alternative (B) lenders and some insurer programs bridge that gap, at a price: expect a larger down payment, full two-year tax compliance, and a rate above best A-lender pricing.

Who stated income is actually for

Business-for-self owners, incorporated contractors, sole proprietors and commission earners whose Notices of Assessment understate their real earnings. It is not for hiding income, and it is not available just because the numbers are inconvenient: lenders verify the business is real and operating — business licence or articles of incorporation, GST/HST filings, business bank statements showing revenue, and a track record, commonly two years in the same field. My document checklist in self-employed mortgage documents in Canada is the companion piece — stated income changes which income figure is used, not how much paperwork proves it.

What lenders still require, even on stated income

Your taxes must be filed and up to date, with any balance owing paid — an outstanding CRA balance can sink any approval. Credit must be strong; stated-income files lean harder on your credit history because the income is less conventionally proven. The stated figure must be reasonable for your industry and business size: stating double what your bank statements support gets the file declined, not approved. And the property must be marketable and owner-occupied or a standard rental — exotic files need not apply.

“Great rates, fast closing, and excellent customer service.” — Madhav Dhakal, Google review

The honest trade-offs

Stated-income approval trades rate for access: B-lender rates sit above A-lender rates, sometimes with lender or broker fees, and insured stated-income programs have their own premium and eligibility rules. For many Alberta business owners that trade is plainly worth it — the alternative is waiting two tax cycles to show higher net income while prices and rates move. The right comparison is total cost over the term you will actually hold, including the refinance path into an A lender once two stronger tax years exist. Run that plan before you sign, through the Pre-Approval & Refinance Check, so the exit is designed at entry.

Frequently asked questions

What is a stated income mortgage in Canada?

It is a mortgage where a self-employed borrower’s income is stated and verified for reasonableness — with business documentation and bank statements — rather than taken solely from net income on tax returns. It is offered mainly by alternative lenders and specific insurer programs.

How much down payment do I need for a stated income mortgage?

More than a standard A-lender file, in most cases. Uninsured B-lender purchases commonly need at least 20% down, and stronger files put down more. The exact requirement depends on the lender, credit and property.

Do I still need my taxes filed for a stated income mortgage?

Yes. Lenders require current tax filings and Notices of Assessment, and CRA balances owing generally must be paid. Stated income changes how income is assessed, not whether tax compliance is checked.

Self-employed in Alberta and tired of your tax return deciding your mortgage? Call (780) 720-8240 — I will try to call you this week, or reply with a good time and we will set a phone appointment to review your business documents and which lender type fits your file.

By Travis Bannert, Realtor and Mortgage Broker

Travis Bannert, Mortgage Broker | Next Door Mortgages, BFL Dominion Lending Centres | (780) 720-8240 | nextdoormortgages.com

For self-employed mortgage programs in Edmonton, see Self-Employed Solutions.