For many Canadians, a mortgage renewal is quick and painless. If a mortgage is in good standing and the borrower is content to stay with the current lender without changing the amortization, loan amount, or borrower structure, the process is usually smooth, even for self-employed borrowers.
That changes the moment a borrower wants to make adjustments. Adding a spouse to the mortgage or title, accessing equity, or switching lenders for a better rate turns a renewal into a refinance. A refinance triggers full requalification under current lending guidelines, and that is where self-employed borrowers often encounter challenges.
It is sound pratice to reach out to your mortgage broker well ahead of your renewal date so that they can help you properly prepare for the road ahead.
A real-life example: planning ahead matter
In early 2024, Barbara reached out with a proactive question. Her mortgage was set to mature in May 2026, but her circumstances had changed significantly since she purchased her home in her name only and arranged her financing in 2021.
She was now married, her husband had immigrated to Canada, and both were navigating self-employment. Rather than waiting for renewal time, she wanted to understand her options early, knowing that her situation involved more than a straightforward renewal.
One key objective was to add her husband to both the mortgage and the title. That single decision shifted the transaction from a simple renewal to a refinance.
Why Barbara’s refinance raised flags early
Barbara’s husband became a permanent resident in early 2023 and initially worked as a podiatrist. By the end of that year, he had purchased the clinic and transitioned to full-time self-employment. Around the same time, Barbara left her salaried role to pursue a new path that would likely involve self-employment as well.
Her question was simple. Would they be in a safe position when the mortgage came up for renewal?
As is often the case in mortgage lending, the answer was that it depended on objectives, timing and documentation.
Why this is not a simple renewal
Because Barbara plans to add her husband to the mortgage and title, this transaction requires a refinance. Even without increasing the loan amount, extending the amortization period, or changing lenders, a refinance means full income verification and credit qualification.
This is where self-employment adds complexity. While her husband will technically have two years of self-employment history by December 2025, lenders rely on filed and assessed personal income tax returns, not business revenue or bank statements alone.
Since his first full year of Canadian income was 2024, only one year of taxable income may be available when the refinance is submitted in spring 2026. Filing the 2025 personal tax return as early as possible in 2026 becomes critical. That step could provide two full years of verifiable income and materially improve the chances of qualifying with an A-lender.
What lenders require from self-employed borrowers
Traditional banks and other A-lenders prioritize consistency. Most require a two-year average of personal taxable income. For incorporated business owners, it is personal income, not corporate gross revenue, that generally determines mortgage eligibility.
Typical documentation for a self-employed mortgage application
- Two years of personal T1 Generals
- Two years of Notices of Assessment confirming taxes paid
- Business financials or T2s if incorporated
- Business registration documents
- Six to 12 months of business bank statements
- Evidence that personal credit is being actively built in Canada
In 2024, we advised Barbara’s husband to focus on two fundamentals. First, establish more than one personal credit facility in Canada. Business credit cards do not report to personal credit bureaus.
Second, ensure that both personal and corporate tax filings are completed on time and in full. This documentation forms the foundation of any self-employed mortgage application.
Can Barbara and her husband qualify with an A-lender?
It is possible, but the outcome depends on the strength and timing of the documentation.
If only one year of personal income is available, some A-lenders may decline the application. With two full years of filed income, along with strong credit and sufficient equity, an A-lender approval may still be achievable.
If traditional lenders are not an option, alternative (B-lenders) remain available. These lenders offer greater flexibility with income documentation, particularly when borrowers demonstrate strong equity positions, good credit, and stable cash flow.
Why waiting until maturity makes sense
Barbara also asked whether adding her husband before maturity would make things easier. The answer was no. Making that change before the term ends would immediately trigger a refinance and full underwriting, likely before the income documentation was strong enough.
Waiting until the mortgage matures in May 2026 gives the couple time to strengthen their credit, complete their tax filings, and prepare a more complete application.
What if A-lenders say no?
If qualification with a traditional lender is not possible at renewal, a short-term alternative lender mortgage may be appropriate. These lenders assess the overall financial picture, including credit, equity, and cash flow, rather than relying solely on tax returns.
B-lender mortgages come with slightly higher rates and shorter terms, but when used strategically, they can serve as an effective bridge. The key is entering with a clear plan to transition back to more affordable financing within 12 to 24 months.
Frequently asked questions from self-employed borrowers
Is renewing a mortgage harder if you are self-employed?
Not if the renewal is straightforward with no changes. Complexity arises when refinancing, switching lenders, or adding borrowers.
Does adding a spouse at renewal count as a refinance?
Yes. Any change to borrowers or title requires full requalification.
Do lenders look at business income or personal income?
Lenders focus on personal taxable income, even for incorporated business owners.
How many years of self-employed income are required?
Most A-lenders require a two-year average based on filed and assessed tax returns.
What happens if I do not qualify with an A-lender?
Alternative and B-lenders may still be options, particularly with strong equity and a clear exit strategy.
Bottom line: plan early when self-employment is involved
Barbara’s situation is common, and her approach was the right one. Starting the conversation two years before maturity created options.
For self-employed borrowers, and especially when adding a new borrower at renewal, early planning is essential.
Key takeaways include allowing sufficient lead time, filing taxes early and completely, building personal credit, waiting until maturity to make structural changes, and understanding all lender options.
A refinance involving self-employed income is more involved than a standard renewal. With proper preparation, however, it is entirely manageable.
Mortgage brokers are not simply order takers. They can be strategic as well as tactical, and help you and your family throughout the term of your mortgage.
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Last modified: December 22, 2025
