Do lenders count 100% of commission income for a mortgage?

It depends on the lender and whether your commission income is guaranteed. Most A-lenders use a 2-year average of your commission income and count 50–100% depending on their policies. If commission is your only income (100% commission), some lenders discount it to 50–80% of the average. If you have a base salary plus commission, most lenders count 100% of the base and 50–100% of the commission component. Lenders like CIBC and TD tend to be more generous with commission income, while others are more conservative. A mortgage broker can match you with the most favorable lender for your income structure.

How do lenders average commission income?

Most lenders calculate your qualifying commission income by averaging your last 2 years of commission earnings. They take the lower of the 2-year average or the most recent year. If your commission income is declining year-over-year, lenders will use the most recent (lower) year only. If your commission is increasing, they typically use the 2-year average. Some lenders require 3 years of commission history for full consideration. The income must be documented through T4s, pay stubs showing YTD commission, and sometimes a letter from your employer confirming the commission structure.

What documents do I need to get a mortgage with commission income?

You need your last 2 years of T4 slips (or T1 generals and NOAs if self-employed commission), recent pay stubs showing base salary and commission breakdown (YTD), an employment letter confirming your position, compensation structure (base + commission split), tenure, and that your employment is ongoing. Some lenders also request T2200 (Declaration of Conditions of Employment) if you claim employment expenses. If you are a self-employed commission earner (real estate agent, insurance broker), you need NOAs, T1 generals, and potentially business financials for 2 years.

Getting a Mortgage with Commission Income in Canada

Commission income is common in Canada — real estate agents, car salespeople, financial advisors, insurance brokers, pharmaceutical reps, and many technology sales professionals earn a significant portion of their income through commissions. Getting a mortgage when your income varies month to month requires understanding how lenders calculate and verify commission earnings.

How lenders classify commission income

Commission Type	How Lenders View It	Documentation
Base salary + commission	Base is guaranteed; commission is variable income	T4, pay stubs (base + commission breakdown), employer letter
100% commission (employee)	Fully variable; higher risk to lenders	T4, 2-year history, employer letter, T2200
100% commission (self-employed)	Self-employed income; different qualification rules	NOAs, T1 generals, 2-year business history
Draw against commission	Treated as commission, not salary — draws are advances, not guaranteed pay	T4, pay stubs, employer letter clarifying draw structure

Key distinction: An employee earning commission (T4 income) is treated differently than a self-employed commission earner (T1 business income). The employee route is simpler and qualifies more easily.

How lenders calculate commission income

The 2-year averaging method

Most lenders use this formula:

Qualifying income = Lower of (2-year average) or (most recent year)

Year	Commission Earned
2024	$85,000
2025	$95,000
2-year average	$90,000
Used for qualification	$90,000 (average, since most recent year is higher)

If income is declining:

Year	Commission Earned
2024	$95,000
2025	$75,000
2-year average	$85,000
Used for qualification	$75,000 (most recent year, since it is lower)

Declining income triggers caution. Lenders want to see stable or growing commission earnings.

Base + commission calculation

Component	Amount	How It Is Used
Base salary	$55,000/yr	Counted at 100%
Commission (2-year avg)	$65,000/yr	Counted at 50–100% depending on lender
Qualifying income (conservative lender, 50%)	$55,000 + $32,500 = $87,500
Qualifying income (generous lender, 100%)	$55,000 + $65,000 = $120,000

The difference between a lender counting 50% vs 100% of your commission is massive — $32,500 more qualifying income in this example, which translates to roughly $70,000–$80,000 more mortgage.

Lender comparison — how they treat commission

Lender	Commission Treatment	Notes
TD Bank	100% of 2-year average (employee)	One of the most commission-friendly; requires 2-year history
CIBC	80–100% of 2-year average	Flexible; strong for sales professionals
RBC	50–100% depending on structure	More conservative with 100% commission earners
BMO	2-year average; may discount variable portion	Middle of the road
Scotiabank	2-year average; 50–100%	Varies by branch/underwriter
National Bank	2-year average at 100% (employee)	Good for Quebec-based commission earners
Credit unions	Varies widely	Some are very flexible; worth exploring
B-lenders	More flexible averaging	Use stated income if commission is hard to document
Monoline lenders (First National, MCAP)	2-year average at 80–100%	Competitive rates; broker-only

Best lenders for 100% commission earners

Scenario	Best Lender Options
Employee with T4 commission (2+ years)	TD, CIBC, National Bank, monoline lenders
Self-employed commission (real estate agent, broker)	Credit unions, B-lenders (stated income), CIBC
New to commission (less than 2 years)	B-lenders; some credit unions will consider 1 year + strong base
Declining commission	B-lenders (will use stated income without strict averaging)

Required documentation

For T4 commission employees

Document	Purpose
Last 2 years of T4s	Confirms total compensation including commission
Recent pay stubs (last 3)	Shows current base + YTD commission
Employment letter	Confirms position, compensation structure, start date, ongoing employment
Commission breakdown	Letter or pay stub detail showing base vs commission split
T2200 (if claiming employment expenses)	Some lenders request this to understand net commission income
NOA (Notice of Assessment)	Last 2 years — confirms CRA-reported income matches T4s

For self-employed commission earners

Document	Purpose
Last 2 years of T1 generals	Shows total self-employment income
Last 2 years of NOAs	CRA confirmation of reported income
Business financial statements	Income statement showing gross revenue and expenses
GST/HST registration	Proof of active business
Business bank statements (12–24 months)	Shows actual cash flow
Accountant letter	Confirms income is reasonable for the business

Qualification examples

Example 1: Sales rep with base + commission

Factor	Details
Base salary	$60,000
Commission (2024)	$45,000
Commission (2025)	$55,000
2-year commission average	$50,000
Lender using 100% commission	Qualifying income: $110,000
Lender using 50% commission	Qualifying income: $85,000
Mortgage with 100% count (5.25% stress test)	~$510,000
Mortgage with 50% count (5.25% stress test)	~$395,000
Difference	$115,000 more mortgage with the right lender

Example 2: Real estate agent (100% commission, self-employed)

Factor	Details
Gross commission income (2024)	$140,000
Gross commission income (2025)	$160,000
Business expenses	$45,000/yr (brokerage fees, marketing, vehicle, etc.)
Net income reported on NOA (avg)	$105,000
A-lender qualification	Based on $105,000 NOA income
B-lender stated income	Can state $140,000–$150,000 with bank statement support
Mortgage difference	~$165,000 more with a B-lender stated income program

Example 3: New commission earner (less than 2 years)

Factor	Details
Started commission job	14 months ago
YTD commission (annualized)	$70,000
A-lender	Declines — requires 2 full years
B-lender	May consider 1 year of T4 history + employer letter
Strategy	Wait 10 months for 2-year history OR use B-lender now and refinance later

Strategies to maximize qualifying income

Strategy	How It Helps
Time your application	Apply after your best commission year, when the 2-year average is highest
Get the right employer letter	Ensure it states your commission structure clearly and confirms ongoing employment
Use a mortgage broker	Brokers know which lenders are most commission-friendly — this is critical
Minimize other debts	Pay down car loans, LOCs, and credit cards to improve your TDS ratio
Consider co-borrower	A spouse with stable T4 income strengthens the application
Choose the right lender	The difference between 50% and 100% commission counting can be $100,000+ in purchasing power
Build a 2-year track record	If you recently switched to commission, wait for 2 full years if possible
Keep T4s clean	Avoid excessive T2200 deductions that reduce your T4 income below what lenders need

Commission income and the stress test

All commission income is subject to the mortgage stress test at the qualifying rate (contract rate + 2% or 5.25%, whichever is higher). The stress test applies to the commission portion the same way it applies to base salary.

Qualifying Income	Mortgage at 5.25% Stress Test	Mortgage at 7.25% Stress Test
$80,000	~$370,000	~$300,000
$100,000	~$465,000	~$375,000
$120,000	~$555,000	~$450,000
$150,000	~$695,000	~$565,000

Approximate — assumes 25-year amortization, GDS 39%, no other debts, property tax and heating estimated

Common challenges and solutions

Challenge	Solution
Less than 2 years of commission history	Use a B-lender until you have 2 years; or combine with a co-borrower who has stable income
Commission income is declining	Lenders use the lower year — consider waiting for a stronger year or use stated income via B-lender
Employer will not provide a detailed letter	Work with HR to get the minimum: position, compensation structure, start date, ongoing status
Self-employed and income is hard to prove	Use a B-lender stated income program with bank statements and accountant letter
High gross commission but high expenses	A-lenders use net income; B-lenders can state gross with reasonable expense deductions
Seasonal commission (bunched earnings)	Annual T4 matters more than monthly fluctuations; ensure 2-year consistency