Self-Employed Mortgages in Peterborough — A Complete Guide

If you're self-employed and looking to buy in Peterborough, Ontario, you’re not alone — the Kawarthas area has been an active market, and self-employed borrowers are a growing slice of buyers. This guide walks you through how lenders assess self-employed income, the documentation you’ll need, mortgage options available in 2025, practical ways to improve approval odds, and what those local Peterborough market numbers mean for your purchase. Throughout, I’ll use plain language and actionable steps so you can move forward confidently.

Quick snapshot (what matters right now)

• The Bank of Canada cut its policy rate to 2.50% on September 17, 2025, which has influenced mortgage pricing and lender prime rates.
• Typical advertised 5-year fixed rates for well-qualified borrowers were around ~3.9% at the end of September 2025 (rates vary by lender and borrower profile).
• Peterborough’s local market exhibits steady prices, with average sale prices reported in the $600k range in recent months and modest projected growth of approximately 2% through the end of 2025. Local MLS summaries show an average of around $613k in some areas.

Why self-employed mortgages are different

Lenders focus on stable, verifiable income. For traditional employees, pay stubs and employer contacts make verification straightforward. Self-employed borrowers must prove their income in other ways — and that’s the crux lenders evaluate consistency, sustainability, and documentation.

Key differences:

• Lenders typically want 2–3 years of tax history (T1s / NOAs).
• Some lenders review profit & loss statements, business bank statements, GST/HST filings, and incorporation or sole-proprietorship documents.
• CMHC and major insurers now offer clearer pathways for qualified self-employed borrowers, making it easier for some applicants to access insured mortgages.

What lenders typically require (document checklist)

Gathering everything up front speeds approvals. Most lenders will ask for:

1. Notices of Assessment (NOAs) from CRA — usually 2–3 years.
2. T1 General tax returns corresponding to those NOAs.
3. Business financials — year-to-date Profit & Loss (P&L) statement and, sometimes, balance sheets.
4. Business registration/incorporation documents (Articles of Incorporation, business number, GST/HST registration).
5. Bank statements — both personal and business (3–6 months).
6. Client contracts or invoices to show future income stability (if applicable).
7. An explanation letter describing your business model, seasonality, and why income is stable.
8. ID and down payment source documents (savings statements, gift letters, sale of asset paperwork).

Mortgage options for self-employed borrowers

• Conventional insured mortgages (high-ratio) — possible if you have ≥5% down and meet mortgage insurance rules. CMHC has programs to support self-employed borrowers who can document income.
• Conventional uninsured mortgages (20%+ down) — wider lender acceptance; income verification rules still apply.
• Bank statements programs / “bank-statement” mortgages — some lenders (including alternate lenders) will qualify income via business or personal bank deposits if NOAs understate actual cash-flow. These often carry higher rates and stricter criteria.
• Private mortgages — short-term option when traditional financing isn’t possible; expect higher interest and fees. Good as bridge financing, not a long-term solution.
• Portfolio or “Stated Income” lending — limited lenders still use stated-income models, but with compensating factors and higher rates.

How the current rate environment affects self-employed buyers

Lower policy rates (such as the BoC's cut in September 2025) tend to push market mortgage rates down over time, but lenders also price mortgages based on long-term bond yields and risk. Self-employed borrowers may still face a slight premium over salaried borrowers due to perceived documentation risk, making it especially valuable to shop around for lenders and work with a mortgage broker.

7 practical tips to improve approval odds

1. Get your NOAs and T1s in order — lenders rely on CRA documents above most others.
2. Show consistent deposits — business bank statements that display stable income patterns are helpful.
3. Reduce personal debt — lower debt service ratios look better on your file.
4. Increase your down payment — more equity reduces lender risk and widens options.
5. Keep business and personal accounts clean — lending underwriters look for transfers, loans, and one-off deposits.
6. Use a mortgage broker who knows self-employed underwriting — brokers can match your file with a lender that has the right appetite.
7. Consider a co-signer or guarantor only if truly necessary — it can improve approval chances, but it also has legal implications.

How much can you afford? (simple calculator logic)

Lenders use Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. A typical guideline:

• GDS ≤ 35% of gross monthly income (housing costs + taxes + condo fees)
• TDS ≤ 42–44% of gross monthly income (housing + other debts)

Because self-employed borrowers’ reported income may be lower on tax returns (due to tax planning), lenders sometimes use average income over 2–3 years, which can lower the qualifying amount. That’s why showing supporting documentation to substantiate actual cash flow matters.

Peterborough market — what to expect when you buy

Peterborough’s market has been relatively steady in 2025, with average sale prices regionally in the low-to-mid $600,000s in many subsectors and modest projected growth (around +2% through the end of 2025, according to local broker reports). Inventory is higher than the peak of the hottest pandemic, which gives some buyers negotiating room — but strong neighbourhoods still command faster sales. Use local comps, not provincial averages, when setting offers.

Common hurdles and how to clear them

• Seasonal income dips — explain seasonality with contracts and a YTD P&L.
• Large one-time deposits — document source (sale of asset, gift, loan).
• Tax planning that lowers reported income — show bank statements or accountant letters that prove sustainable cash-flow.
• Unfiled taxes or outstanding CRA balances — resolve these first; unpaid taxes are red flags.

Timeline — How Long Does It Take?

Expect the self-employed mortgage process to take slightly longer than for salaried borrowers — typically 2–6 weeks from application to commitment, depending on the readiness of documentation and appraisal timing. Being proactive with NOAs, P&Ls, and bank statements shortens that timeline.

Frequently asked questions (short answers)

• Can I get a mortgage with one year of self-employment? Sometimes, specific lenders accept terms of 12 months or more with strong financials, but most mainstream lenders prefer terms of 24 to 36 months.
• Are private lenders my only option? No — many banks and monoline lenders work with self-employed borrowers when documentation supports the income.
• Do I need to disclose business losses on my tax return? Yes — full disclosure is required; underwriters consider both income and business risk.

Next steps — a checklist to get started

1. Pull the last 2–3 NOAs and T1 returns.
2. Prepare YTD P&L and 3 months’ business + personal bank statements.
3. Compile business registration or incorporation docs.
4. Consult with a mortgage broker who specializes in self-employed clients and is familiar with the Peterborough market.
5. Get pre-approved — it makes offers stronger and faster.

Need local help?

If you need help matching your self-employed file with the right lender in Peterborough, I can connect you with local options and review your file to ensure it meets the exact documentation requirements lenders have. For a local, Peterborough-focused mortgage broker who understands self-employed underwriting and the Kawarthas market, reach out:

Mike Cara — Mortgage Broker in Peterborough, Ontario
398 McDonnel St., Unit 4, Peterborough, ON K9H 2X4
Call: 705-775-7878 / 705-772-7878