For many Canadians, mortgage renewal is quick and easy. If the mortgage is in good standing and the borrower is willing to stay with the current lender without changing amortization, loan amount, or borrower structure, the process usually goes smoothly even for self-employed borrowers.
Things change when a borrower wants to make adjustments. Adding a spouse to the mortgage or title, gaining equity, or switching lenders to get a better rate can all turn a renewal into a refinance. Refinancing triggers a blanket requalification under current lending guidelines, which is where individual borrowers often run into challenges.
It’s wise to contact your mortgage broker well in advance of your renewal date so that they can help you properly prepare for the road ahead.
Real life example: planning ahead is important
In early 2024, Barbara took the initiative and asked the question. Her mortgage was due to expire in May 2026, but her situation has changed significantly since she purchased the home in her own name and arranged financing in 2021.
She is now married, her husband has immigrated to Canada, and both are self-employed. Rather than wait for a contract extension, she wanted to understand her options as early as possible because she knew her situation was more than a simple renewal.
One of the key goals was to bring her husband into the mortgage and title. The decision changes the deal from a simple renewal to a refinancing.
Why Barbara’s refinancing caught people’s attention early
Barbara’s husband became a permanent resident in early 2023 and initially worked as a podiatrist. By the end of that year, he purchased the practice and transitioned into full-time self-employment. Around the same time, Barbara left her salaried position to pursue a new path that might also involve self-employment.
Her question was simple. Are they in a safe position when the mortgage comes up for renewal?
As is often the case with mortgages, the answer is that it depends on goals, timing, and documentation.
Why this isn’t a simple update
Since Barbara planned to add her husband to the mortgage and title, the deal required refinancing. Even without increasing the loan amount, extending the amortization term, or changing lenders, refinancing means comprehensive income verification and credit qualifications.
This is where self-employment adds complexity. While her husband would technically have been self-employed for two years by December 2025, the lender relied on personal income tax returns filed and assessed, not just business income or bank statements.
Since his first full Canadian income year is 2024, there may only be one year of taxable income when filing for refinancing in the spring of 2026. It becomes critical to file your 2025 personal tax return as early as possible in 2026. This step provides two full years of verifiable income and greatly improves your chances of qualifying for an A-rated lender.
What lenders require of self-employed borrowers
Traditional banks and other A-rated lenders prioritize consistency. Most require two years of average personal taxable income. For business owners, it’s usually personal income that determines mortgage eligibility, not the company’s total income.
Typical documents for a self-employed mortgage loan application
- Two years of personal T1 general
- Two-year Notice of Assessment confirming tax paid
- Business Finance or T2 (if established)
- Business registration documents
- 6 to 12 months of business bank statements
- Evidence that Canada is actively building personal credit
In 2024, we advise Barbara’s husband to focus on two basic principles. First, establish multiple personal credit institutions in Canada. Business credit cards are not reported to personal credit bureaus.
Second, make sure personal and corporate tax returns are completed on time and completely. This document forms the basis of any self-employed mortgage application.
Can Barbara and her husband qualify as A-rated lenders??
This is possible, but the results depend on the strength of the document and its time.
Some A-rated lenders may deny an application if there is only one year of personal income. With two years of complete filing income, coupled with strong credit and sufficient equity, approval from an A-rated lender remains achievable.
If a traditional lender is not feasible, alternative lenders (B lenders) may still be an option. These lenders offer greater flexibility in terms of income documentation, especially when the borrower demonstrates a strong equity profile, good credit, and stable cash flow.
Why does it make sense to wait until maturity?
Barbara also asked if joining her husband before he matured would make things easier. The answer is no. Making this change before the end of the term will immediately trigger refinancing and full coverage, most likely before the income documentation is strong enough.
Waiting until the mortgage comes due in May 2026 will give the couple time to strengthen their credit, complete their tax returns and prepare a more complete application.
What if Lender A says no?
If you are unable to qualify for a conventional lender at renewal time, a short-term alternative lender mortgage may be appropriate. These lenders evaluate overall financial health, including credit, equity and cash flow, rather than relying solely on tax returns.
B-lender mortgages have slightly higher interest rates and shorter terms, but if used strategically, they can serve as an effective bridge. The key is to have a clear plan to transition to more affordable financing within 12 to 24 months.
Frequently Asked Questions for Self-Employed Borrowers
Will it be more difficult to renew your mortgage if you are self-employed?
Not if the renewal is simple and nothing changes. This can get complicated when refinancing, changing lenders, or adding borrowers.
Does adding a spouse at renewal count as a refinance?
Yes. Any change in borrower or ownership requires full requalification.
Do lenders look at business income or personal income?
Lenders focus on personal taxable income, even for corporate business owners.
How many years of self-employment income are needed?
Most A-rated lenders require a two-year average based on tax returns filed and evaluated.
What happens if I don’t qualify for an A-rated lender?
Alternative lenders and B lenders may still be options, especially with strong equity and a clear exit strategy.
Bottom line: Plan early when it comes to self-employment
Barbara’s situation was common and she did the right thing. Starting the conversation two years before maturity creates options.
For individual borrowers, especially when adding a new borrower at renewal, early planning is critical.
Key takeaways include allowing enough preparation time, filing taxes early and completely, establishing personal credit, waiting until maturity before making structural changes, and understanding all lender options.
Refinancing involving self-employment income is more involved than a standard renewal. However, with proper preparation, this is completely manageable.
Mortgage brokers are more than just order takers. They can be strategic or tactical and are here to help you and your family throughout the entire mortgage term.
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Consumer Finance Tips Mortgage Strategies Mortgage Tips Renewal Ross Taylor Self-Employed Mortgage
Last modified: December 22, 2025
