Self-employed in Peterborough? Your income still qualifies.

Business-for-self borrowers across Peterborough routinely show a lower line-150 net income than their actual cash flow, because good accounting minimizes taxable income. The fix is add-backs: capital cost allowance, home-office and vehicle expenses, and certain one-time deductions can be added back to lift your qualifying income with the lenders that read a BFS story properly.

Here is what that is worth, as an illustrative composite — not a client file and not a promised outcome. A sole proprietor reports $85,000 on line 150. Their return also carries $12,000 of capital cost allowance, $8,000 of home-office expense and $6,000 of vehicle expense — $26,000 of deductions that reduced tax but did not reduce the money that reached the household. Added back, qualifying income becomes $111,000.

What that buys in this market: at 4.39% over 30 years with 20% down, tested at the 6.39% stress-test rate and Ontario's property tax rate, $85,000 of income supports a purchase near $451,000. The same borrower at $111,000 supports about $597,000 — a lift of roughly $146,000 from paperwork that was already in the return.

Set that against the local number: Peterborough's $595,000 average needs a household income around $111,000 at the stress-test rate on a 20%-down file. Whether the add-backs close that gap is exactly the calculation we run first, and it is the difference between a decline and an approval on a file where nothing about the business changed. We structure the file — and pick the lender — around the income you actually earn, not just the number at the bottom of your return.

The two terms get used interchangeably and they are not the same product.

Business-for-self (BFS), fully documented means you prove income the ordinary way: two years of T1 generals, two years of Notices of Assessment, and the business schedule behind them — a T2125 for a sole proprietor, corporate returns for an incorporated business. The lender takes your reported income, applies the add-backs above, and underwrites you essentially as it would a salaried applicant. A-lender pricing is available on this path, and it is where we try to land every file that can reach it.

Stated income is a different program. You declare an income that is reasonable for your industry and tenure; the lender verifies that the business exists and is credible rather than verifying the exact figure. It exists because some genuine businesses cannot show their real cash flow on a T1 — a growing company reinvesting everything, a borrower under two years, an income story too complex to reduce to one line. Both insurers that offer it — Sagen's Business for Self and Canada Guaranty's Low Doc Advantage — cap it at 90% LTV and require two years self-employed with a strong credit profile, which on a Peterborough home at the $595,000 average means about $59,500 down.

Which fits is usually decided by two facts: how many years of clean NOAs you have, and how far your line 150 sits below your real cash flow. Two-plus years and a reasonable line 150, documented BFS wins on price. Under two years, or a line 150 that add-backs cannot rescue, stated income keeps the deal alive at a premium. We tell you which one your file reaches before anyone pulls credit.

All three are "self-employed" and all three qualify differently. This is the single most common reason a self-employed borrower gets a surprising answer from a bank: the branch applied the wrong income model to their structure.

The corporate row is where the expertise actually lives, because lenders calculate corporate income very differently from one another and none of them publish the rule. Some will use only what you paid yourself in salary and dividends. Some will add a share of retained earnings if the company is stable and you own enough of it. Some gross dividends up to reflect that they arrive after corporate tax; whether a lender does so is set in its own underwriting policy rather than published, so it is a question we ask lender by lender rather than assume. The one gross-up an insurer documents is CMHC's 15% on sole-proprietor or partnership income, or an add-back approach on eligible deductions.

The practical consequence: an incorporated borrower who is declined at one lender for "insufficient income" is frequently approved at another on identical financials, purely because the second lender counts retained earnings. Knowing which is which is most of what we do on these files.

With two years of T1s and clean Notices of Assessment, many Peterborough self-employed borrowers qualify at full A-lender pricing — essentially the same rate as a salaried file. Under two years, or with CRA arrears or bruised credit, a B-lender alt-A program or a private bridge keeps the deal alive now. Here is what each tier costs on the $476,000 mortgage a 20%-down purchase at Peterborough's $595,000 average implies:

The private rate above is CMHC's Q3 2025 average rather than a quoted offer, and the alt-A figure is the top of our own posted self-employed range — both are illustrative of the tier, not a rate we are promising you. The gap is the point: $105,640 more over five years on the identical property, for the identical borrower, decided entirely by which tier the file reaches.

Which is why the tier is a bridge, not a destination. We map the refinance back to A-pricing before you sign the alternative deal — usually 12 to 24 months out, once two clean NOAs have accumulated — so the flexibility that saves the purchase does not quietly become a permanent cost. If a lender or broker puts you in an alternative product without that plan written down, ask why.

The 20%-down figure this page models is the uninsured standard, and a great many self-employed buyers assume it is the only option open to them. It is not. A fully documented BFS file — two years of NOAs, an income story the add-backs support — is underwritten much like a salaried one, which means the ordinary insured minimums apply.

On a Peterborough home at the $595,000 average that is a tiered minimum of about $34,500 (5.8%) rather than $119,000 — 5% on the first $500,000 and 10% on the balance. The default-insurance premium of roughly $22,420 is financed onto the mortgage rather than paid in cash, so the payment rises to about $2,902 from $2,370. Stated income cannot go that far: both insurers cap it at 90% LTV, roughly $59,500 down here.

Two things follow. First, an insured file is lower risk to the lender, so it is usually priced below the uninsured equivalent — the smaller down payment can come with the better rate, which surprises people. Second, the first-time-buyer tools stack on top: the FHSA carries up to $40,000 of lifetime room with tax-deductible contributions, the RRSP Home Buyers' Plan adds up to $60,000 repaid over 15 years, and two spouses can each use both — up to $200,000 of tax-advantaged down payment for one household, against a $34,500 requirement here.

If this is your first purchase, read the Peterborough first-time buyer page alongside this one — the two programs combine, and the combination is routinely missed.

This is the question we are asked first and the one that decides how fast a file moves. Assemble these before you shop, not after you have an accepted offer.

Everyone, regardless of structure:

• Two years of T1 general tax returns, complete with all schedules
• Two years of Notices of Assessment — and they must show no outstanding balance, or a payment arrangement in good standing
• Two pieces of government photo ID
• 90 days of history on the down payment, showing where the money came from
• Six months of business bank statements
• A CRA account confirmation or statement of account showing your standing

Sole proprietor, add: two years of T2125 (statement of business activities), your business licence or registration, and your CRA business number.

Partnership, add: the partnership agreement, and the T2125 showing your share.

Incorporated, add: two years of T2 corporate returns, T4 and T5 slips, articles of incorporation, corporate financial statements, corporate bank statements, and an accountant's letter confirming ownership percentage and the business's standing.

If you are registered for HST, add proof of registration and your filing standing. The single most common cause of delay on these files is not a missing document — it is an NOA with a balance owing that nobody mentioned until the lawyer ordered the payout statement.

It can, and which way it falls is a lender-by-lender variable that borrowers almost never hear about. Ontario businesses collect 13% HST on most revenue, and that money is never yours — it is collected on the government's behalf and remitted.

Work it through. A business showing $200,000 of gross revenue on HST-inclusive invoices has collected roughly $23,009 of tax inside that figure; the actual revenue is about $176,991. Some lenders strip the tax out before assessing income. Others take the gross figure as reported. That single choice moves the revenue a lender works from by roughly 13%.

On a comfortable file it changes nothing. On a borderline one it is the whole decision — and it cuts both ways, because a borrower whose net income is being assessed off a gross-of-tax revenue figure may be qualifying on income they never actually received. We know which lenders use which method and place the file accordingly, rather than submitting to whichever lender happens to have the best rate that week and hoping.

Tax arrears are common on business-for-self files and they are rarely a sign of anything wrong — instalment obligations on income tax and HST land on a schedule that does not care whether a client has paid you yet. They do, however, change which lenders can act.

A-lenders generally require CRA to be current, or on a documented payment arrangement being honoured. B-lenders are frequently willing to proceed where the transaction itself pays the balance out at closing, with the solicitor sending the funds directly. Private lenders are the most flexible and the most expensive, which makes them a bridge rather than an answer.

The complication to catch early is a lien. Where the CRA has registered one against the property it sits on title, every solicitor and lender will see it, and it narrows the lender list sharply — usually to those whose deal structure discharges it as part of closing. Wage garnishment matters too: it reduces the income a lender can actually use, which changes your GDS and TDS ratios rather than just your paperwork.

None of it is fatal, and all of it is worse when discovered late. We check CRA standing on day one and build the payout into the file structure where one is needed — see mortgages with a CRA lien and clearing CRA debt through a mortgage for how those files are actually put together.