Qualifying for a Mortgage When Most of Your Income Is Bonus or Commission
Canadian prime lenders average bonus and commission income over the prior two years and apply a haircut — typically using the lower of the two years, or 50-100% of the average depending on lender policy and trend. A strong base salary plus a stable bonus history qualifies without issue; a thin base with lumpy variable pay often requires 3 years of history or a step down to alternative lenders.
Who this is for
Salaried earners whose bonuses or commissions represent 20%+ of total compensation, including sales, tech, finance, and performance-based roles.
- Base salary (used at 100%)
- Always included in full
- Variable pay, 2-year trending up
- 80-100% of 2-yr average
- Variable pay, 2-year trending down
- Lender may use lower of the two years only
- New role, <2 years variable history
- Often excluded entirely from qualification
Framework
The standard rule
Two years of T4s plus two years of Notices of Assessment. Lender averages the variable component (bonus/commission lines) across the two years. If year 2 is higher than year 1, most lenders use the 2-year average. If year 2 is lower, most lenders use year 2 only (the conservative read). NOAs are the source of truth — pay stubs alone aren't enough for variable income.
The haircut
Most prime lenders discount variable income 10-30% even after averaging, recognizing that future bonuses aren't guaranteed. Some lenders are more generous for certain industries (unionized, long-tenured, commissioned salary-floor roles) and stricter for others (pure commission with no base, new-to-industry). Ask your broker which lenders treat your specific role best — the spread on approved borrowing power can be $75-125k between the most and least generous lender.
Key considerations
- A role change mid-way through the 2-year window usually resets the clock — even if the new role pays more.
- Restricted stock units (RSUs) and equity comp are typically treated more conservatively than cash bonus — often excluded or used at 50% only if vested and verifiable.
- Group RRSP matching and benefits don't count as qualifying income.
- If you've had a promotion with a higher OTE, letters from HR stating the new OTE can sometimes be used alongside historical averages.
Common mistakes
- Using a recent strong year's paystubs alone as the basis of expectation — lenders will always go back to NOA-verified history.
- Assuming commission-only income qualifies like salary. It rarely does, and often requires a B-lender route until 3 years of history.
- Forgetting that self-employment in the form of a contract with a single employer (common in tech) is treated as self-employment, not employment, regardless of how the payer codes it.
Action steps
- 01Pull your last two T4s and NOAs. Calculate base + 2-year average variable as your qualifying income starting point.
- 02If trending down, get ready to qualify on year-2 numbers only and adjust your price range accordingly.
- 03If variable pay is >40% of total, shop the file across 3+ lenders — approved amount will vary meaningfully.