Salaried Employees vs. Self-Employed: Mortgage Pre-Approvals in Ottawa

Mar 24

Thinking about buying a home in Ottawa? Whether you’re eyeing a downtown condo or a home in the suburbs, getting pre-approved for a mortgage is one of the most important first steps. It gives you a clear budget, helps you move faster when the right property comes along, and shows sellers you’re serious.

But depending on how you earn your income—whether you’re salaried or self-employed—the pre-approval process can look a little different. Both routes are entirely possible and common in Ottawa’s real estate market. It’s just a matter of knowing what to expect and being prepared.

Salaried Employees: A Straightforward Approval Process

If you're a full-time employee with a steady income, lenders in Ontario (and especially in Ottawa) tend to view your file as lower risk. That means less paperwork and a smoother path to pre-approval.

What you’ll need:

Letter of employment confirming your job title, income, and start date
Two recent pay stubs
Most recent CRA Notice of Assessment
Government-issued photo ID
Recent bank statements

Why this helps:
Your income is easy for lenders to verify, and your job stability provides reassurance. As long as your credit is in good shape and your debts are manageable, the process tends to move quickly.

Tips to strengthen your chances:

Avoid job changes right before applying
Pay down credit card balances or other high-interest loans
Make sure your credit report is error-free

Self-Employed Buyers: More Paperwork, But Still Very Doable

Ottawa has a thriving community of small business owners, contractors, freelancers, and consultants. If you're self-employed, getting a mortgage is absolutely possible—you’ll just need a bit more documentation to prove your income.

What you’ll need:

Two years of personal and business tax returns
Two years of CRA Notices of Assessment
Business license or articles of incorporation
Proof of income (e.g. bank statements, invoices, contracts)
Financial statements (if incorporated)
Government-issued ID

Why it’s different:
Because your income may fluctuate and you might claim tax deductions that reduce your “net income” on paper, lenders take a closer look. They're not penalizing you—they just need more information to understand your financial stability.

Tips to strengthen your chances:

Keep your business finances organized and separate
Talk to your accountant about minimizing deductions in the year or two before applying
Work with a mortgage broker who specializes in self-employed clients

Only Been Self-Employed for a Year? You May Need a B Lender

If you’re newly self-employed or don’t yet have two full years of income, most A lenders (like major banks and credit unions) in Ontario may not be able to approve you. That’s where B lenders come in.

B lenders work with a broader range of borrowers and offer more flexibility when it comes to income verification and credit profiles. This can be a great short-term solution to get you into a home sooner.

Why you might consider a B lender in Ottawa:

You only have 1 year of self-employed income
You’ve taken significant tax write-offs
You earn commission-based or seasonal income
Your credit score is below traditional thresholds
You have a higher debt-to-income ratio

While B lenders typically charge slightly higher interest rates and may require a larger down payment or fees, they can help you access homeownership without waiting another year or two. Many Ottawa buyers work with a B lender first, then refinance later with an A lender once they’ve built up more financial history.

Pre-Approval Is Possible for Everyone

No matter how you earn your income, there are solid paths to mortgage pre-approval in Ottawa. The key is understanding your options, being prepared with the right documents, and working with the right professionals to guide you through the process.

If you’re not sure what you qualify for—or whether you’ll need to consider an A or B lender—speaking with a mortgage broker is a great place to start. They’ll assess your situation, help strengthen your application, and ensure you’re set up for success.