What You Need to Know About Getting a Mortgage on Commission Income
If you earn your living on commission — whether you’re a real estate agent, car salesperson, or any other commission-based professional — you already know that your income can feel like a bit of a roller coaster. Some months are stellar; others are… well, let’s just say you’re happy you put a little aside. But what does that mean when it’s time to buy a home? Or refinance? Or even just get pre-approved? The short answer: lenders look at commission income differently, and you’ll need to be prepared.
In this article, I’ll break down exactly what you need, what lenders are looking for, and how to put yourself in the best position to succeed when you’re paid on commission.
Here’s what we’ll cover:
The Golden Rule: The 2-Year Average
Business-for-Self Commission Earners: The Extra Layer
How Lenders View Stability (And How to Prove It)
Real-World Examples: How Realtors and Other Commissioned Professionals Can Prepare
How I Can Help: Making the Process Easier for You
The Golden Rule: The 2-Year Average
When it comes to qualifying for a mortgage on commission income, lenders want to see consistency. The golden rule is this: you’ll typically need two years of commission income history, and they’ll average it out. That average is what they’ll use to determine how much mortgage you can afford.
Let’s say you’re a realtor and your last two years looked like this:
- 2023: $105,000 net income (after expenses, before taxes)
- 2024: $75,000 net income
The lender isn’t going to take the $105K or the $75K. They’re going to take the average: $90K. That’s your qualifying income, not your best year, and not your worst.
NOTE: For many lenders, if the annualized income varies from the average by more than 20%, the lower year’s income is used for qualification purposes.
This is why keeping your income steady — or trending upward — is so important if you’re planning to apply for a mortgage anytime soon. Large fluctuations can cause problems.
Pro Tip: Be prepared to show your T1 Generals, your Notices of Assessment, and your T4A slips if applicable. Lenders want to see what you told CRA, not just what’s in your business bank account.
Business-for-Self Commission Earners: The Extra Layer
If you’re not just on commission, but also considered self-employed — like most realtors, mortgage agents, or insurance advisors — lenders apply a bit more scrutiny. Your accountant might be working overtime to help you minimize taxes, but lenders aren’t impressed by low net income. They care about what’s left after expenses because that’s what pays the mortgage.
You’ll need:
- 2 years of full tax returns (T1 Generals)
- 2 years of CRA Notices of Assessment (showing no taxes owing)
- Possibly a business license, Articles of Incorporation, or HST/GST registration if you operate under a formal business structure
- A year-to-date profit and loss statement, especially if the current year is looking stronger than last year
If you’re incorporated, they’ll often ask for your corporate financial statements too.
The more organized you are, the smoother this goes. Lenders want to see not only income but also proof you’re running a sustainable, legitimate business.
How Lenders View Stability (And How to Prove It)
The truth is, lenders aren’t fans of unpredictability. They want to see a track record that says, “This person knows how to earn on commission, even when the market’s tough.”
Here’s how you can help make your case:
- Show year-over-year consistency or improvement.
- Demonstrate savings habits — your bank account tells a story.
- Keep taxes up-to-date — no lender wants to lend to someone who owes CRA a boatload.
If your last year was significantly better than the previous one, some lenders will accept an exception with additional documentation, but this depends on the strength of the overall application.
Real-World Examples: How Realtors and Other Commissioned Professionals Can Prepare
Meet Sarah, The Realtor
Sarah’s been crushing it in real estate for three years. In her first year, she made $65K. Second year, $90K. This year, she’s already sitting at $120K year-to-date. She wants to buy her first home.
Because Sarah’s business is growing, she might worry that the lender will only look at her lower-earning years. That’s where I come in. By pulling together her current P&L statement, tax docs, and year-to-date figures, I can present a strong case to a lender that 2024’s income is sustainable — not a fluke.
Meet Mike, The Commissioned Sales Rep
Mike’s been in the car business for five years, but the last two years were uneven: $80K one year, $60K the next. He’s nervous lenders will lowball his income. By showing his average earnings and providing letters of employment, commission breakdowns, and bank statements verifying deposits, I help reinforce his income stability despite the fluctuations.
How I Can Help: Making the Process Easier for You
If you’re on commission, you’re already juggling enough — managing client expectations, chasing leads, closing deals. You shouldn’t have to become a mortgage underwriter in your spare time. That’s where I come in.
Here’s how I help you:
- I review your income documents upfront so there are no surprises later.
- I know which lenders are commission-friendly (and which aren’t).
- I help package your file to tell the best story of your income and stability.
- I give you practical advice on what to do now to qualify down the road — especially if you’re still building your income history.
Whether you’re a realtor looking to practice what you preach (homeownership!) or a client earning commissions who wants guidance, my job is to help you navigate the hoops lenders set up so you can get to the finish line with confidence.
Allen’s Final Thoughts
Being on commission isn’t a barrier to homeownership — but it does mean you need to be thoughtful and strategic. Keep your records clean, stay on top of taxes, and plan ahead for big moves like buying a home or refinancing.
If you’re unsure where you stand today, or what steps you need to take to make yourself “mortgage ready,” let’s talk. I’m not just here to fill out forms and collect pay stubs. I’m here to help you understand the process, prepare properly, and ultimately succeed.
Your job is to earn the commission. My job is to help you leverage it into homeownership.
Reach out anytime. I’m here to make this easy.
