Getting a Mortgage With Commission, Contract, or Variable Income in Canada (2026)

Why Variable Income Is Treated Differently

A salaried employee's income is easy for a lender to verify: one letter and a recent pay stub. Commission, bonus, overtime, contract, and seasonal income can change from year to year, so lenders look back at a track record instead of taking this year's number at face value.

This matters because your qualifying income drives your GDS and TDS ratios. The same person can qualify for a very different mortgage depending on how their income is counted.

The Two-Year Average Rule

Most A lenders use the average of your last two years of variable income, taken from your T4s or T4As and confirmed by your Notices of Assessment (NOAs). If your income dropped in the most recent year, many lenders use the lower year instead of the average.

Commission Earners

• Fully commissioned (no base salary): lenders typically want two full years in the same role or industry, averaged
• Base salary plus commission: the base is usually used in full, and the commission portion is averaged over two years
• New to commission: if you recently moved from salary to commission, some lenders will count only the base or your previous salary until you have a track record

Bring two years of T4s and NOAs, a recent pay stub, and a job letter showing your role, start date, and base salary if any.

Contract Workers

Contract income is judged on continuity. Lenders want to see that you have worked in the same field for a while, typically two years, and that your current contract is likely to be renewed or replaced.

What helps:

• A current contract with a clear rate and end date
• Evidence of past renewals or back-to-back contracts
• Two years of T4As or NOAs showing consistent income
• A history in the same profession, for example a nurse on agency contracts or an IT consultant

If you invoice through your own corporation, lenders usually treat you as self-employed instead. See our self-employed mortgage guide for how that works.

Bonus, Overtime, and Shift Premiums

These are usually averaged over two years the same way as commission. Some lenders will use a guaranteed bonus in full if the employment contract states it, and some accept overtime only if it is regular and the employer confirms it is expected to continue.

If overtime was unusually high in one year, for example because of a one-time project, expect the lender to discount it.

Probation and New Jobs

If you are on probation in a new salaried job, many A lenders will still lend if you are in the same line of work as before, with a letter confirming your salary. Probation in a new commission-based role is harder, since there is no commission history to average yet.

Seasonal workers, such as those in construction, fishing, or tourism, are usually qualified on a two-year average that includes Employment Insurance only where the pattern repeats each year.

Which Lenders Are More Flexible?

• A lenders and the big banks: strict two-year averages, but the best rates
• Monoline lenders (broker-only): similar rules, but policies on bonus, overtime, and contract renewals differ lender to lender
• Credit unions: often more flexible with shorter histories and seasonal work
• B lenders: can use more recent income or a shorter history, at a higher rate

Because each lender treats variable income differently, the same file can pass at one lender and fail at another. This is where a mortgage broker comparing lenders makes the biggest difference.