Stated Income Mortgages in Ontario: How They Work and Who Qualifies

Stated income doesn't mean "no taxes required." That's the first thing worth clearing up, because a lot of what's online makes it sound like you write down a number and the lender takes your word for it. They don't. Not in Ontario, not in 2026.

What a stated income mortgage actually does is narrower, and honestly more useful. It lets a lender qualify you on an income that's reasonable for your business, even when your Notice of Assessment shows a lot less because your accountant did their job. You still file. You still show the money coming in. The lender just stops pretending line 15000 is the whole story.

If you want the full picture of how lenders read self-employed income (the two-year average, add-backs, salary versus dividends), start with my self-employed mortgage guide. This post goes deep on one route: stated income, who it fits, and what it really costs.

What a Stated Income Mortgage Actually Is

Lenders call it a few things. Stated income. BFS without traditional third-party income validation. "Reasonableness" programs. Same idea.

You tell the lender what you earn, and that number doesn't have to match your NOA. The lender then tests whether it makes sense for someone in your industry, running a business your size, with the deposits your bank statements actually show. If it passes, that's your qualifying income.

Picture a renovation contractor with $210,000 in annual deposits, a truck, two trailers, and an NOA of $58,000 after write-offs. Stating $95,000 is defensible. Stating $200,000 isn't, because nobody nets their gross in the trades, and the underwriter knows it.

Who Qualifies for Stated Income in Ontario

This is where a lot of what's online gets it wrong. Here's what lenders actually want to see.

Time in business

Two years is the standard. The insured programs want it, and so do most B-lenders. A few B-lenders will look at a file with 12 to 24 months of history if everything else is strong: good credit, a real down payment, low debt, contracts in hand. Under a year? Very hard. I'd rather tell you that now than after you've paid for an appraisal.

Taxes filed, CRA in good standing

You need to be filing, on time. Most lenders want your recent NOAs even on a stated file, to confirm you're filing and that nothing is owing. A balance with CRA, or a payment arrangement, will stop most stated income files cold. If that's you, read what to do when you owe CRA first.

Credit

Stated income is a program for people whose income is hard to document. It's not a bad-credit program. The stronger your score and the cleaner your recent payment history, the more lenders you have to choose from. If your credit has taken real damage, the conversation shifts, and self-employed bad credit options are a separate path.

Down payment

This is the big one people underestimate. Insured stated income programs start at 10% down on a purchase. B-lender stated income typically wants 20% or more. So a $750,000 purchase means $75,000 at minimum on the insured route and $150,000 or more with a B-lender, before closing costs.

How Lenders Test a Stated Income

The reasonableness test isn't a formula. It's an underwriter asking whether your story hangs together, and they check it against the paper. Expect to provide most of this:

• 6 to 12 months of business bank statements showing regular deposits
• Your two most recent NOAs, plus proof nothing is owing to CRA
• Business registration, master business licence, or articles of incorporation
• HST returns, which confirm revenue independently of anything you say
• An accountant letter confirming how long you've operated and what the business does
• Contracts or recent invoices, if your work runs on them

Then comes the part nobody likes talking about. The gap between what you state and what you've declared to CRA. A reasonable gap is expected; that's the whole point of the program. A huge one raises the obvious question of why the income a lender is being asked to rely on never showed up on a tax return. Be ready for it. And never inflate. An income you can't support isn't a stretch, it's misrepresentation, and it can follow you long after closing.

Insured vs. B-Lender Stated Income

There are two main routes, and they suit different borrowers.

	Insured stated income	B-lender stated income
Minimum down	10% on a purchase	Typically 20%+
Insurance premium	Yes, higher tier than a standard insured file	No
Rate	Close to A-lender pricing	Roughly 0.5% to 1.5% above A-lender rates
Lender fee	Usually none	Usually yes
Flexibility	Stricter rules, less room on credit	More room on credit, history, and property type
Best for	Smaller down payment, strong credit, 2+ years in business	20%+ down, thinner history, or a file the insurers won't take

Insurer and lender rules shift, and purchase price limits apply on the insured side. Which route fits your file is a question for the actual numbers, not a chart.

What Stated Income Really Costs

On the B-lender side, the rate premium is where the cost lives. Rough math: on a $500,000 mortgage, a rate 1% higher is about $5,000 more in interest over the first year. Then add the lender fee.

Is that worth it? Often, yes. If the alternative is waiting two more years to buy, or restructuring your taxes and handing CRA more money to show a bigger NOA, the premium can be the cheaper option. Sometimes it isn't. That's a math question, and I'd rather run it with you than guess.

Rates change, so I don't publish them

You'll see blogs list exact stated income rates. They go stale in weeks. Ask me for a current quote based on your file; it'll be accurate the day you get it.

The Exit Plan: Getting Back to an A-Lender

A B-lender stated income mortgage should have an end date in mind. Most of these are shorter terms, one or two years, and the plan is simple: use the time to get your NOAs to where an A-lender can qualify you, then move at renewal.

That usually means a conversation with your accountant about how much income to declare in the next tax year. Paying a bit more tax for a year or two can buy you a much cheaper mortgage for the next five. Plan for that from day one, not in the month before renewal.

Stated Income for a Refinance, Renewal, or Switch

Stated income isn't only for buying. It shows up a lot on refinances, and the rules are different there.

Insured mortgages are for purchases. So if you already own and want to take equity out (to consolidate debt, fund a renovation, or pay out a CRA balance before it grows), a stated income refinance runs through a B-lender, and the maximum is typically 80% of your home's value. Sometimes less, depending on the lender and the property.

Renewals are simpler. If you're in an insured stated income mortgage today, it can usually move to another lender at renewal as a straight switch, as long as the amount and amortization don't grow. If you're with a B-lender, renewal is the moment to check whether your last two NOAs now qualify you with an A-lender. That's the whole exit plan, and it only works if someone actually runs the numbers 90 days before your maturity date instead of signing the renewal letter that shows up in the mail.

Getting Your File Ready

A stated income file lives or dies on how clean it looks. Underwriters see a lot of messy ones. Yours doesn't have to be.

Start with your bank accounts. Every dollar of business revenue should land in one business account, not split across a personal chequing account, a line of credit, and an e-transfer to your spouse. Six to twelve months of consistent deposits in one place is the single most persuasive document you'll hand a lender.

Then HST. File on time and keep the returns handy, because they confirm your revenue from a source the lender trusts more than you. Pay anything owing to CRA before you apply. Get your accountant to write a short letter confirming how long you've been operating and what the business does. Pull your credit and fix anything wrong on it. And don't open new credit in the three months before you apply.

None of this is complicated. It just has to be done before the house hunt, not during it.

When Stated Income Isn't the Right Fit

Commission salespeople on a T4? Not stated income. You're qualified on your documented earnings, usually a two-year average, and you often have more options than a business owner does.

New in business, under 12 months? Most stated programs won't touch it yet. There can be other routes (a co-signer, a larger down payment with a private lender, or waiting a few months), but they're different conversations.

And if your NOA already supports the mortgage you need, skip stated income entirely. Qualifying on documented income gets you better rates and more lenders. Stated income is a tool for a specific gap. Use it when you have that gap.

Frequently Asked Questions