Why Self-Employed Individuals Should Avoid the Bank for Mortgages

Josh Perez • September 12, 2023

If you're self-employed and in the market for a mortgage, it may seem like a natural step to head straight to your bank. After all, it's a familiar place where you handle your finances, right? However, this may not be the best approach for self-employed individuals, and there are two significant reasons why: people and products.

One of the biggest benefits of being a business owner is not sucking out every dollar personally and paying at the highest marginal tax levels, but keeping it within the corporate structure, pay less tax, and use those extra dollars to grow the business sustainably.

If you're self-employed and in the market for a mortgage, it may seem like a natural step to head straight to your bank. After all, it's a familiar place where you handle your finances, right? However, this may not be the best approach for self-employed individuals, and there are two significant reasons why: people and products.


1. The People Problem:

Over the years, there has been a troubling trend in banks - a growing number of employees with diminishing experience in financial planning. This can be a real issue for self-employed individuals seeking a mortgage. When you walk into a bank, you want to be heard and understood, especially when it comes to qualifying for a mortgage.


Unfortunately, the lack of expertise in many bank employees often means that not enough questions are asked. These questions are crucial for understanding how your business operates and why it operates the way it does. Without this understanding, it's challenging to secure the right mortgage tailored to your unique financial situation.


2. The Product Predicament:

Another issue with going directly to the bank for a mortgage is the products they typically offer. Most bank products rely heavily on what a business owner takes out personally from their business as a basis for qualification. In many cases, this approach isn't the most prudent for self-employed individuals.

Think about it – as a business owner, you might want to reinvest a significant portion of your profits back into your business to foster growth and increased profitability. Bank products, however, often penalize this approach because they focus on personal income rather than the financial health of your business as a whole.

3. The Mortgage Broker Solution:

So, what's the alternative for self-employed individuals looking for a mortgage that suits their unique financial situation and goals? Consider working with a mortgage broker.

Mortgage brokers collaborate with a wide range of lenders who take a more common-sense approach to self-employed borrowers. They understand that assessing financial health should encompass the entire business, not just personal income. This means they are more likely to do a deep dive into your overall business financials, working with you to find a mortgage that aligns with your needs and aspirations.

One of the most significant advantages of being a business owner is the ability to keep profits within your corporate structure. This strategy allows you to pay less tax and use those extra dollars to grow your business sustainably. Bank products often don't cater to this essential aspect of business ownership.


In conclusion, if you're self-employed and looking for a mortgage, it's crucial to consider alternatives to the traditional bank route. Mortgage brokers offer expertise and a broader range of mortgage products that better accommodate the needs and financial strategies of self-employed individuals. Don't let a lack of understanding or an ill-fitting product hinder your path to homeownership or investment. Explore your options and find a mortgage solution that aligns with your unique financial journey.


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Deposit vs. Down Payment: Key Differences for Homebuyers

By Josh Perez • February 18, 2026
When you’re buying a home, two terms often cause confusion: deposit and down payment . While they’re related, they serve very different purposes in the homebuying process. Here’s what you need to know. What Is a Deposit? A deposit is the money you provide when you make an offer on a property. Think of it as a show of good faith that proves you’re serious about purchasing. How it works : Typically, you provide a certified cheque or bank draft that your real estate brokerage holds in trust. If your offer is accepted, the deposit remains in trust until the deal moves forward. If negotiations fall through, the deposit is refunded. Connection to your down payment : Once the sale is finalized, your deposit becomes part of your total down payment. Why it matters : The amount is negotiable, but a larger deposit can make your offer more attractive in a competitive market. Keep in mind, however, that if you back out after conditions are removed, you risk losing your deposit. What Is a Down Payment? Your down payment is the amount you contribute toward the purchase price of your home when securing a mortgage. Minimum requirement : In Canada, the minimum down payment is 5% of the home’s purchase price. Anything less than 20% requires mortgage default insurance. Sources : Down payments can come from your savings, the sale of another property, RRSP withdrawals (through the Home Buyers’ Plan), a gift from family, or even borrowed funds. Example: How They Work Together Imagine you’re buying a $400,000 home with a 10% down payment ($40,000). When you make your offer, you provide a $10,000 deposit . Once conditions are met, that deposit is transferred to your lawyer’s trust account. At closing, you add the remaining $30,000 to complete your full down payment. The lender provides the rest—$360,000—through your mortgage. The Bottom Line Your deposit shows commitment and secures your offer, while your down payment is what makes the mortgage possible. Together, they work hand in hand to get you into your new home. 📞 If you’d like clarity on deposits, down payments, or any other part of the mortgage process, let’s connect. I’d be happy to walk you through it step by step.
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Is a 5% Down Payment a Mistake? Here’s the Unpopular Truth.

By Josh Perez • February 15, 2026
Discover why a 5% down payment isn’t always irresponsible. Learn when a low down payment is a smart financial move for Ontario homebuyers and when it’s a risk.