Quick answer: A stated income mortgage lets a self employed borrower qualify on a reasonable income they state, instead of only the net income on their tax return. In Canada, the insured stated income programs come from Sagen and Canada Guaranty. You need at least two years of self employment, at least 10% down and good credit, and you pay a higher insurance premium. If you have less than two years or credit issues, B lenders offer similar flexibility with a larger down payment.
Business owners in BC often write off legitimate expenses, which lowers the income on their tax return. That is smart tax planning, but it can shrink what a bank will lend. Here is how stated income programs solve that, honestly and legally.
What does stated income mean?
You declare an income that is reasonable for your industry, your experience and your business. The lender and insurer test it for reasonableness against your tax returns, your business records and your bank deposits. It must be true. Stating an income you do not earn is mortgage fraud, and no reputable broker will help with that.
What are the rules for the insured stated income programs?
| Rule | Sagen Business for Self | Canada Guaranty Low Doc Advantage |
|---|---|---|
| Purpose | Purchase, owner occupied, 1 to 4 units | Purchase, owner occupied, 1 to 4 units |
| Maximum financing | 90% of the value | 90% of the value |
| Time self employed | at least 2 years | at least 2 years, as primary owner |
| Credit | score of 600 or more above 80% financing | strong credit profile |
| Down payment | 10%, at least 5% from your own savings | 10%, at least 5% from your own resources |
| Commission income | not eligible | not eligible |
| Tax arrears | not allowed | not allowed |
Value limits also apply: under $1.5 million above 80% financing and under $1 million at or below 80%, according to the insurers' published criteria.
How much more does stated income cost?
The main extra cost is the mortgage insurance premium, which is added to your mortgage. Sagen's published premiums for its stated income program are:
| Financing | Premium |
|---|---|
| up to 65% | 1.50% |
| 65.01% to 75% | 2.60% |
| 75.01% to 80% | 3.30% |
| 80.01% to 85% | 3.75% |
| 85.01% to 90% | 5.85% |
By comparison, a fully documented insured mortgage at 90% financing carries a 3.10% premium. That gap is why it pays to check whether you can qualify with full documents first.
Is there a way to qualify without stated income?
Often, yes. CMHC no longer offers stated income, but for sole proprietors it allows lenders to gross up your net business income by 15%, or to add back certain expenses instead. For many borrowers, that is enough to qualify with full documents and a lower premium. Some lenders also add back non cash expenses such as depreciation. Our self employed mortgage page covers the full range of options.
What if you have been self employed less than two years?
The insured stated income programs need two years. With less, CMHC asks lenders to look at factors such as whether you stayed in the same line of work, bought an established business or have strong savings. Some B lenders accept as little as six to twelve months in business if you worked in the same field before, usually with about 20% down and bank statements showing your deposits. See our B lender page.
What documents will you need?
- two or three years of Notices of Assessment and T1 General returns;
- business registration or articles of incorporation;
- financial statements or T2 returns if incorporated;
- six to twelve months of business bank statements;
- proof that personal and business taxes and GST or HST are paid up;
- proof of your down payment.
What are the key takeaways?
- Stated income lets you qualify on a reasonable, true income when your tax return shows less.
- Sagen and Canada Guaranty require two years in business, 10% down and no tax arrears.
- The insurance premium is higher, so check full document options first.
- With less than two years, B lenders may help with a larger down payment.
Self employed in Surrey, Vancouver or the Fraser Valley? Book an appointment and I will compare full document, stated income and B lender options for your business. If you drive truck for a living, read our guide for truck drivers and owner operators.
What other questions do readers ask?
Is a stated income mortgage legal?
Yes. Insurers such as Sagen and Canada Guaranty run stated income programs for self employed borrowers. The income you state must be true and reasonable for your type of business, and lenders check it against your tax returns and bank records.
Can I get a stated income mortgage with less than two years in business?
The insured stated income programs require at least two years of self employment. With less time, some B lenders consider borrowers who were in the same line of work before, often with a larger down payment.
Can commission salespeople use stated income?
No. Sagen and Canada Guaranty exclude commission income from their stated income programs. Commission earners usually qualify on their two year average income instead.
Do I need to be caught up with CRA?
Yes for the insured programs. Both Sagen and Canada Guaranty require that you have no tax arrears. If you owe CRA, a short term second mortgage to clear the debt is sometimes the first step.
Where do these numbers come from?
- Sagen: Business for Self (Alt A) program
- Canada Guaranty: Low Doc Advantage
- CMHC: self employed borrowers
- CMHC self employed fact sheet
- OSFI: minimum qualifying rate for uninsured mortgages
Published November 5, 2026. This article is general information, not personal financial advice. Rates and programs change, and every approval depends on your full application. Asim Ali is a licensed mortgage broker with Dominion Lending Centres A.I.M.I. Collective Mortgage Group.