Self-Employed Mortgage Calculator — Canada (NOA-Based)

How Canadian Lenders Calculate Mortgage Eligibility for Self-Employed Borrowers

If you’re a freelancer, contractor, sole proprietor, or small business owner in Canada, getting a mortgage can involve additional documentation. Traditional calculators assume you have a T4 slip — but you don’t. Lenders typically focus on your net income from your Notice of Assessment (NOA) — specifically, Line 150 on your T1 General.

This calculator helps you estimate your borrowing power using a method commonly used by Canadian lenders: averaging your net income over the last two years. Based on standard lender practices — helping you align expectations with lender guidelines.

Why Your Gross Revenue Doesn’t Matter (And What Does)

You might earn $120,000 in gross revenue — but if you write off $50,000 in business expenses, your taxable income is $70,000. Lenders typically assess the $70,000. Here’s what they commonly consider:

• Consistency — Two years of stable or increasing net income on your NOA
• Documentation — Your T1 General and Notice of Assessment (NOA) from CRA
• Average — (Year 1 Net Income + Year 2 Net Income) ÷ 2 = Your Qualifying Income
• Debt Ratios — Your total monthly debts should generally stay under 42% GDS and 44% TDS

This is why a “$120K income” on a standard calculator may not reflect lender assessments — they often use net income. Our tool helps you set realistic expectations.

Who Should Use This Calculator?

This tool is designed for Canadian borrowers who:

• File taxes as sole proprietors, freelancers, or independent contractors
• Have two years of filed tax returns with CRA
• Want to understand their estimated borrowing power before talking to a broker
• Are planning to buy a primary residence, second home, or investment property

If you’re employed with a T4, use our standard mortgage calculator instead. Explore all our tools on our homepage.

How to Use the Self-Employed Mortgage Eligibility Calculator

This tool helps you estimate your mortgage eligibility using your Notice of Assessment (NOA) income. By entering your net income from the last two years, home price, down payment, and loan terms, you can see your estimated qualifying income, maximum mortgage amount, monthly payment, and total interest over time.

Follow these steps to get accurate results:

Step-by-Step Guide to Using the Calculator

1. Select Currency — Choose "Canadian Dollar (CAD)" to ensure calculations reflect Canadian rules.
2. Choose Income Method — Select "Declared (2-Year NOA Average)" to match lender practices.
3. Enter Your NOA Income — Input net income from:
   • Last Year — From your most recent T1 General and NOA (Line 150)
   • Previous Year — From your prior year’s T1 General and NOA
   The calculator automatically averages these to determine your qualifying income.
4. Input Home Value — Enter the total purchase price.
5. Enter Down Payment — Input your available down payment.
6. Set Annual Interest Rate — Enter the rate you expect (e.g., 6.5%).
7. Choose Amortization Term — Select 25–30 years (longer terms = lower payments, more interest).
8. Select Payment Frequency — Monthly, bi-weekly, or weekly.
9. Click “Calculate Mortgage Eligibility” — Results appear instantly.

Understanding Your Results

After calculating, you’ll see:

• Qualifying Income (est.) — Your 2-year average net income.
• Estimated Mortgage Amount — Max loan based on income, down payment, and ratios.
• Payment (per frequency) — Estimated monthly (or bi-weekly) payment.
• Total Interest (full term) — Total interest paid over the life of the loan.

Visualizing Your Loan Breakdown

The pie chart shows how your payment splits between:

• Principal — Reduces your loan balance
• Interest — Cost of borrowing

Early payments are mostly interest. Over time, more goes to principal.

Viewing and Exporting the Amortization Schedule

The amortization schedule shows month-by-month payment details. You can:

• Show/Hide Schedule — Click “Show Amortization Schedule” for full details.
• Export as CSV — Download for spreadsheets or to share with your broker.

The table includes: Date, Payment, Principal, Interest, and Remaining Balance.

Pro Tips for Accurate Estimates

• Use Realistic Income — Only enter income reported on your NOA.
• Check Debt Ratios — Aim for GDS < 42% and TDS < 44%.
• Include Other Debts — Add student loans, car payments, or credit cards to your budget.
• Adjust for Market Changes — Update inputs if rates change or you plan extra payments.

Frequently Asked Questions

Next Steps — Prepare for Pre-Approval

• Gather your documents — Last 2 years of T1 General + NOA from CRA
• Check your credit score — Aim for 680+ (free via Borrowell or Credit Karma)
• Save for down payment + closing costs — Minimum 5% for homes under $1M CAD
• Speak with a mortgage broker — They can match you with lenders experienced with self-employed files

Remember: This calculator provides estimates for educational purposes only. Always consult a licensed mortgage professional for personalized advice.