You’re a physician earning $300K+ a year. You have no employer. No T4. No pay stubs. You bill through OHIP or a provincial health plan and get T4A slips. To a bank rep who’s never seen this before, you look like a freelancer. You’re not.
When you bill OHIP (or your provincial equivalent), you receive a T4A at year-end. This is technically “self-employment income” in the eyes of most lenders. That means they want 2 years of tax returns, a 2-year average of your income, and sometimes they’ll use a lower figure than your actual income on top of that.
If your income increased significantly from year one to year two (which is common for new physicians ramping up), some lenders will penalize you by averaging the two years down instead of using the higher, more current number.
Locum physicians have it even harder. If you’re doing shifts at multiple hospitals or clinics, your income looks “irregular” to a lender even though you’re working consistently. The key is finding a lender who understands the difference between irregular income and variable income from a stable profession.
When fee-for-service income is growing year-over-year — which is normal for physicians building a practice — a 2-year average works against you. The right lender knows this. Most banks don’t.
Most physicians don’t get paid like salaried employees. You get large deposits (OHIP billings, AFP payments, locum fees) at irregular intervals. Between deposits, your chequing account sits low. After a deposit, it spikes. Traditional mortgages don’t care about any of that.
Some lenders offer an all-in-one product that combines your mortgage, chequing, and savings into a single balance. Every dollar deposited immediately reduces your mortgage balance, which means you’re paying less interest from the moment a payment lands. When you need to pay bills, you draw from the same account. Interest is calculated daily on whatever the net balance is.
We are not going to tell you whether to incorporate. That is between you and your accountant. But we can tell you exactly what happens to your mortgage when you do, because almost nobody explains this part.
Here is what happens. You are billing $350K as a sole proprietor. Your T4A shows $350K. You qualify for a large mortgage easily. Then you incorporate. Your accountant (correctly) tells you to pay yourself a lower salary and keep the rest in the corp. Your qualifying income just dropped by $200K on paper. When you apply for a mortgage, the lender sees the salary number, not the billing number.
That does not mean you should not incorporate. It means you should think about the timing. If you are buying a home in the next 1-2 years, get the mortgage done first. If you already own, it matters less. And if you are already incorporated, there are ways to present your income so lenders see the full picture. That is what we do.
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Self-employed physicians have multiple income verification paths. The right lender choice can add $200K+ to your qualifying amount. We match you with lenders who understand T4A, locum, and mixed income.
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