What lenders are actually checking
Lenders use your NOA to confirm the income reported on your application matches what you declared to the CRA. They also check for any amounts owing, since an outstanding tax balance can be a red flag or even a condition that needs to be cleared before closing.
Self-employed borrowers need two years
If you run your own business, lenders typically average your income over the last two NOAs. This can work against you if you write off a lot of expenses to lower your taxable income, since a smaller declared income means a smaller mortgage you can qualify for.
- Two years of NOAs are the standard requirement
- Lenders average the two years unless income is rising steadily
- Outstanding CRA balances usually must be paid before closing
What to do if you owe money to the CRA
An amount owing on your NOA doesn't automatically disqualify you, but most lenders want proof it's been paid or set up on a payment plan with the CRA. Clearing this early avoids a last-minute scramble during underwriting.
Getting your NOA quickly
You can access your NOA instantly through the CRA My Account portal, which is much faster than waiting for a mailed copy. Having a printable PDF ready to send to your lender or broker saves valuable time during a tight closing timeline.
Frequently asked questions
- What if I haven't filed my taxes yet?
- Most lenders require your most recent NOA, so filing on time each year is important if you plan to apply for a mortgage soon.
- Does a lower declared income always hurt my approval?
- It can reduce how much you qualify to borrow, since lenders base affordability on your net taxable income rather than your gross business revenue.
- Can I add back some business expenses to boost my qualifying income?
- Some lenders allow adjustments for non-cash expenses like depreciation, but this varies by lender so it's worth discussing with your broker.