Often, yes, though it depends on how long you have earned it and how steady it looks on paper. Most lenders average your commission over about two years using your tax documents, and a bank may count only part of it. Some alternative lenders look at the bigger picture, which can give commission earners another path. Approval is never guaranteed.
How Do Lenders Actually Count Commission Income?
Lenders like income that repeats. A steady paycheque is easy to read, while commission moves around, so lenders look for a pattern before they trust it.
The usual method is an average. The lender collects your commission earnings from the last two years, adds them up, and divides to get a yearly figure. That average, plus any base salary, becomes the income used to size your mortgage.
What Will a Lender Ask to See?
Plan on gathering a few documents. The exact list depends on the lender, but these come up often:
– T4 slips and Notices of Assessment for the last two years, so the lender can see what you earned and what the tax office confirmed.
– Recent pay stubs showing year-to-date commission.
– An employment letter that explains your pay structure, such as base plus commission, and how long you have been in the role.
– Your T1 General, if you claim work expenses against your commission. Some lenders subtract those expenses from your income.
A Notice of Assessment is the tax office’s official summary of your return. It is a favourite of underwriters because it is hard to argue with.
What Does This Look Like With Real Numbers?
Here is a made-up example. Say a car salesperson in Barrie earns a base salary of about $30,000 a year. Commission came in around $40,000 in the earlier year and around $60,000 in the most recent one.
A lender that averages two years would use about $50,000 of commission. Add the base, and the income used is about $80,000. A lender that is more careful might use the lower year, or count only a share of the commission, and land on a smaller number. These figures are round and illustrative only, and your own result will depend on the lender and the file.
Why Do Banks Sometimes Count Only Part of My Commission?
Banks follow tight, standard formulas, and commission looks uncertain to a formula. If your pay swings from year to year, or you have changed jobs recently, a bank may shave the number down or ask for a longer history.
That can sting when you know your income is solid. It is fair to feel that way, and it is also very common. The file did not fit the formula, and that does not say anything about your work.
What If My Commission Dropped, or Jumped This Year?
A drop can pull the average down, so lenders may ask what happened. A short note about a slow market or a one-time event can help.
A big jump is a different story. Lenders may hesitate to use a single strong year, since they cannot yet see whether it repeats. Averaging protects them, and it can leave you waiting a little longer before your newest numbers count in full.
What If I Am Paid Fully on Commission?
Fully commission-based roles are read more carefully than base plus commission. Some lenders may treat the file a lot like a self-employed one, which means more weight on tax returns and time in the role. If this is you, ask early which documents each lender wants.
Can an Alternative Lender Help With Commission Income?
Sometimes. An alternative lender is a regulated lender with more flexible rules than a bank. They may weigh your full history, your bank deposits and the story behind your pay, which can help when your income is real but uneven.
Flexibility often comes with a different rate, a lender fee or a larger down payment than a bank would ask for, and terms tend to be shorter. Smart planning starts with the exit. Many borrowers use the first term to build a longer, steadier income record, then move back to bank pricing at renewal. Ask your agent to sketch that path before you sign anything.
How Can I Strengthen My File Right Now?
Pull your last two Notices of Assessment and your recent pay stubs into one folder. Ask your employer for a letter that describes your pay structure. Keep commission deposits going into the same account where possible, so the trail is easy to follow.
If you are a year or so from buying, avoid big new debts and keep your credit tidy. A short chat before you shop can show you which month your numbers start working in your favour.
Frequently asked questions
How many years of commission income do I need for a mortgage in Ontario?
Many lenders like to see about two years, since they average it. Some may consider less in certain cases, and each lender sets its own rules.
Will a bank use my best year of commission?
Usually not. Lenders tend to average, or use the lower year, so one strong year may not carry the whole application.
Can I get a mortgage if I just switched to a commission job?
It may be harder, since there is little history to average. A mortgage agent can look at the lenders that review new roles more flexibly, and no outcome is guaranteed.
Does base salary plus commission count differently than 100 percent commission?
Often, yes. A base salary gives lenders a steady anchor, while fully commission roles may be read more like self-employment.
Do I need an employer letter for a commission mortgage?
Most lenders ask for one. It confirms your pay structure and your time in the role.
Ready to Talk Through Your Numbers?
If you earn commission and the bank said no, I would love to hear your goals and what the bank told you. Book a free 15-minute chat and we will look for another path together. You can also grab the free guide, The Homeowner’s Equity Playbook, at lorafenn.ca/free-home-equity-guide/.
About the author
Lora Fenn, Mortgage Agent L1, DLC Yellow Brick Mortgages (Brokerage Licence #13854), a Barrie mortgage agent who helps Ontario homeowners and buyers find another path when the bank says no, serving Barrie, Simcoe County and all of Ontario.
*This page is general education, not financial advice. Any figures are illustrative only and subject to lender approval (O.A.C.). Lora Fenn, Mortgage Agent L1, DLC Yellow Brick Mortgages (Brokerage Licence #13854).*
