Self Employed Income Gross-Up Program
Income Gross-ups are a tool some lenders use to increase the amount of self-employed income we can use on your mortgage application. When used properly, income gross-ups can increase the amount you qualify for for your next mortgage.
- Creates higher qualifying income
- Incorporated or Sole proprietor
- Accepted by many lenders
What Is A Self Employed Income Gross-Up Program?
If you’re self-employed in Canada, you’ve likely noticed a frustrating gap between how much money your business earns and how much income a bank will let you use to qualify for a mortgage. That gap is exactly where an income gross-up program comes into play to help you qualfiy.
When used correctly, a gross-up program can increase the income a lender uses for qualification on your mortgage application—often by around 15%.
With more usable income on your mortgage application, you often times will be able to qualify for a larger mortgage amount.
Why Use An Income Gross-Up Program?
Many business owners run into the same frustrating problem: their business earns strong income, but after write-offs and expenses, their tax returns show a much lower “net” income — as a result the bank declines their mortgage application, or approves them for a much lower amount, leaving the business owner feeling lost and without a clear next step to take.
An income gross-up program helps self-employed borrowers by letting certain lenders count more of their self-employed income towards mortgage qualification.
The result is often the ability to qualify for a larger mortgage amount without changing how you run your business or file your taxes.
Do you have questions?
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Who Can Use An Income Gross-Up Program?
Income gross-up programs are available to self-employed Canadians who claim self-employed income income on their personal tax returns.
Income gross-ups can be a good fit if your business has a steady track record from year to year and your tax returns show lower “net” income because of normal business expenses and write-offs.
Many lenders offer income gross-up programs for sole proprietors and partnerships. In some cases, certain lenders may also allow gross-ups for incorporated borrowers, including salary (T4) and dividend income.
Documents Required
To apply for an income gross-up program, lenders often require:
- Most Recent Two years of personal T1 Generals and all schedules
- Most Recent Two years of Notices of Assessment (NOAs)
- Business financial statements (if incorporated)
- T2125 statements for sole proprietors
Clean, consistent documentation improves our odds for securing a mortgage approval.
Why Working With a Self-Employed Mortgage Specialist Matters
- Access to Lenders Who Use Income Gross-Ups
- Focused on self-employed mortgages
- Knowledgeable in self-employed mortgage programs
- Faster, Smoother Mortgage Approvals
Case Study: Using Gross-Ups to Turn a Decline Into an Approval
Client Details:
The client is a self-employed sole proprietor who was looking to purchase a new home. He had been in business for several years and had consistent income from year to year.
His personal tax returns included several legitimate business write-offs, which lowered his net income on paper and reduced the amount he could qualify for under a traditional mortgage program.
❌ Problem:
Once the client had received an accepted offer on his new home, the bank declined his mortgage application based on the client’s lower taxable income.
Even though the client had steady work and healthy cash flow, the bank’s standard qualifying approach didn’t allow for the slightly higher mortgage amount — the mortgage application was declined by his bank and the client was left feeling stuck and unsure of what to do next.
✅ Solution:
The client came to us for a second opinion.
We reviewed the mortgage application and matched them with a lender that offers an income gross-up program for self-employed borrowers.
By applying a 15% gross-up to their qualifying income (based on the new lender guidelines), we were able to increase the usable income on the application and present the file in a way that better reflected the client’s real financial picture.
With the improved qualifying income and a properly packaged submission, the mortgage was approved, helping the client move forward with the purchase of their new home.
💡 Did you know?
Did you know an income gross-up program can often be the difference between a mortgage approval and a decline?
Other Self-Employed Mortgage Programs
Frequently Asked Questions
Do gross-ups increase my taxes?
No. These adjustments are used only for mortgage qualification and do not affect how you file or pay taxes.
How much income can my income be grossed-up?
It depends on the lender and your file, but many gross-up programs increase your qualifying income by around 15%. Some lenders allow more or less based on your income history, business stability, and overall application strength.
Are gross-ups available for incorporated business owners?
Yes—in some cases. Most gross-up programs are designed for sole proprietors and partnerships, but a few lenders will allow a form of gross-up for incorporated business owners as well. It depends on how you pay yourself (salary, dividends, or a mix), how consistent the income is, and what your tax documents show.
Can gross-up programs help if a bank has already declined me?
Often, yes. Self-Employed mortgage declines are commonly due to lender selection rather than borrower strength.
Will using an income gross-up program affect my interest rate?
In many cases, using an income gross-up program does not come with a higher interest rate.
Get Self-Employed Mortgage Advice Today
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