Can a Self-Employed Person Get a Private Mortgage in Ontario?

Yes, self-employed Ontarians can get a private mortgage through Stonefield Capital, which qualifies borrowers on property equity and exit strategy, not T4 income.

What Is a Private Mortgage for the Self-Employed?

A private mortgage for the self-employed is a short-term, registered loan secured against Ontario real property, approved on the basis of equity rather than provable income. It contrasts with an A-lender or B-lender mortgage, which requires two years of filed income at a level that satisfies GDS/TDS stress-test ratios. The governing rule at Stonefield Capital is simple: the equity in the property and a credible exit strategy drive the approval decision.

Why Do Self-Employed Borrowers Get Declined by Banks?

Banks apply the OSFI B-20 stress test to every residential mortgage. Self-employed borrowers who write off legitimate business expenses often show low net income on their Notice of Assessment, which fails the stress test even when cash flow is strong. Incorporated business owners face a similar problem: retained earnings inside a corporation are not counted as personal income by most institutional underwriters. The mismatch between real cash flow and filed income is the structural reason private lending exists for this borrower type.

How Does Stonefield Capital Underwrite a Self-Employed File?

Stonefield Capital underwrites on equity and exit, not on a GDS/TDS ratio. The key questions are: how much equity does the borrower hold, and what is the realistic plan to repay or refinance the private mortgage at the end of the term?

Income documents are still requested — a Notice of Assessment is always required to confirm there are no significant CRA arrears that could affect the security. T2 corporate returns, T1 generals, or bank statements may also be requested to assess servicing ability and confirm the exit. Missing or unconventional income documents do not automatically kill a deal; they prompt a closer look at equity cushion and exit clarity instead.

What Property Types Qualify?

• Owner-occupied residential (detached, semi, townhouse, condo)
• Investment residential (single-family rentals, small multi-unit)
• Commercial and mixed-use properties
• Vacant land and construction projects (assessed individually)
• Cottage and rural properties (underwritten on equity and local comparables, not rental income)

Stonefield Capital lends across Ontario. Non-urban properties are assessed using comparable sales analysis rather than nightly-rate or occupancy projections.

What Are Common Use Cases for Self-Employed Borrowers?

• Bridge financing — covering the gap between a purchase close and a sale close when bank bridge credit is unavailable
• Debt consolidation — using home equity to retire high-interest credit card or CRA debt, which typically improves the borrower's credit profile over the following months
• Business cash injection — accessing equity to fund operations or a contract without liquidating assets
• Renovation financing — funding an improvement that will support an A-lender refinance once work is complete
• Purchase closing — completing a purchase when institutional approval arrives too late

How Is a Private Mortgage Priced?

Private mortgage rates are set by loan-to-value ratio, property type, loan position (first or second mortgage), and deal complexity. Higher equity generally means a lower rate; a second mortgage behind a large first carries more risk and is priced accordingly. Current rate ranges are published at stonefieldcapital.ca/private-mortgage-rates. Stonefield does not quote live rates in editorial content because pricing moves with market conditions.

Does a Private Mortgage Affect a Self-Employed Borrower's Credit?

A Stonefield Capital private mortgage is registered on title but is not reported to credit bureaus, so it does not directly change a credit score. Borrowers who use the private mortgage proceeds to eliminate high-interest debt typically see their credit profile improve over the following three to twelve months as utilization drops and derogatory balances clear. That improved profile is often what enables the subsequent A-lender or B-lender refinance that serves as the exit strategy.

What Documents Should a Broker Prepare?

1. Most recent two years of Notices of Assessment (personal; T2 if incorporated)
2. Void cheque or banking information confirming property carrying costs are being met
3. Most recent mortgage statement(s) for any existing charges
4. Property address and basic details (type, age, condition)
5. Clear exit narrative: sale, A-lender refinance, or B-lender refinance, with a realistic timeline

T4s, T1 generals, or bank statements may be requested after the initial review depending on what the NOA shows. Preparing them in advance speeds the process.

How Fast Can a Self-Employed Deal Fund?

Stonefield Capital typically does not require a formal appraisal, because underwriting runs a comparable-sales analysis internally — this saves the borrower a fee and several days. When an appraisal is needed, it is flagged in the initial response, not at commitment. Funding in as little as 48 hours is possible in most cases when legal counsel is ready; the bottleneck is legal preparation, not underwriting turnaround.

How Do Brokers Submit a Self-Employed Deal?

Ontario mortgage brokers can submit files directly through the broker portal at stonefieldcapital.ca/brokers. Stonefield Capital holds FSRA mortgage brokerage licence #13722. A deal summary with the property address, requested loan amount, existing mortgage balances, and exit strategy is enough to get an indicative response quickly. Full document collection follows once the structure is agreed.

Frequently Asked Questions

Will Stonefield approve a self-employed borrower who can't show two years of filed income?

Yes, in most cases. Stonefield Capital approves self-employed borrowers on the basis of property equity and a credible exit strategy, not on two years of filed income meeting a GDS/TDS ratio. A Notice of Assessment is still requested to confirm no large CRA arrears exist, but low reported income — common when business expenses are legitimately written off — does not automatically decline the file.

Does the borrower need to be incorporated, or does Stonefield lend to sole proprietors too?

Stonefield Capital lends to both incorporated business owners and sole proprietors. The legal structure of the business is less important than the equity held in the secured property and the realism of the exit plan. Incorporated borrowers may be asked for T2 corporate returns alongside personal NOAs; sole proprietors would typically provide T1 generals or bank statements if income verification adds clarity to the file.

What loan-to-value limit applies to a self-employed private mortgage in Ontario?

Stonefield Capital does not publish a single fixed LTV ceiling in editorial content, because limits vary by property type, loan position, and market area. Pricing and indicative LTV guidance are published at stonefieldcapital.ca/private-mortgage-rates. As a general principle, stronger equity positions attract better pricing and higher approval confidence; files where available equity is thin may be structured using cross-collateralization across other Ontario properties.

How long is the term on a private mortgage for a self-employed borrower?

Stonefield Capital offers short-term private mortgages, typically ranging from 1 to 12 months. The term is matched to the borrower's exit strategy — for example, a 6-month term makes sense when the exit is a B-lender refinance expected after the next tax year's NOA confirms stronger income. Stonefield private mortgages run 1 to 12 months, with renewal options where the exit plan warrants it; they are designed as a bridge, not a long-term facility.

Can a broker submit a self-employed deal where the borrower also has CRA arrears?

CRA arrears are reviewed carefully because CRA holds super-priority collection rights that can rank ahead of a registered mortgage. Small or manageable arrears do not automatically decline a file, but a repayment plan or partial payout at closing is commonly required to protect the security position. Brokers should disclose CRA arrears upfront in the deal summary rather than at the commitment stage; early disclosure allows Stonefield Capital to structure around the issue cleanly.