How to Qualify for a Mortgage with Low Income in Canada

Buying a home on a limited income can feel out of reach—especially with high home prices and strict lender rules. But if you’re earning less, it doesn’t automatically mean you can’t get approved for a mortgage.

The truth is, low income isn’t a deal breaker—but you’ll need to plan carefully, understand how lenders evaluate your application, and explore available support options.

In this guide, you’ll learn exactly how to qualify for a mortgage with low income in Canada, what lenders look for, and how to improve your chances—even with a smaller paycheck.

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What Do Lenders Consider When You Apply for a Mortgage on a Low Income?

Banks and mortgage lenders don’t just look at how much you earn—they focus on whether you can afford the monthly payments based on your full financial picture.

Here’s what they review:

1. Your Debt-to-Income Ratio (DTI)

This ratio compares your monthly debt payments (credit cards, loans, car payments) to your gross monthly income. The lower your DTI, the more financially stable you appear—even on a low income.

• If your income is limited, aim to pay off smaller debts first to lower this ratio

Want to learn more about how DTI works? Check out our full guide: Can I Get a Mortgage with Debt in Canada?

2. Your Credit Score

Even if you don’t earn much, a strong credit score shows that you’re reliable with payments—this can be a major advantage.

• 680+: Excellent, most lenders will work with you

• 600–679: Acceptable, but you may need to meet extra conditions

• Below 600: May require alternative lenders or larger down payments

Paying bills on time, keeping balances low, and avoiding new credit applications will help you maintain or build your score.

3. Your Down Payment

Your down payment directly affects the size of your mortgage—and for low-income buyers, a larger down payment can make a big difference.

In Canada, the minimum down payment is:

• 5% for homes under $500,000

• 5% on the first $500,000 + 10% on the rest for homes between $500,000–$999,999

• 20% for homes over $1 million (no CMHC insurance allowed)

If your income is lower, aim to save more upfront—it lowers your monthly mortgage and shows lenders you’re serious.

Strategies to Qualify for a Mortgage with Low Income

Even if you don’t meet the typical income standards, here are practical ways to improve your mortgage approval odds:

1. Use a Co-Signer or Joint Applicant

Adding a trusted co-signer—like a parent, sibling, or partner—can significantly boost your application. Their income is added to yours, helping you qualify for a larger loan.

✅ Lenders will look at both credit histories

✅ Co-signers share legal responsibility for the mortgage

If your co-signer has good credit and stable income, this is one of the fastest ways to qualify with a low income.

2. Apply with a Partner or Family Member

This is different from a co-signer—here, you’re both applying as co-owners. Your combined income improves your affordability, and both parties share the mortgage and ownership.

✅ Makes you eligible for more homes

✅ Can split expenses like property taxes and maintenance

Make sure to have a legal agreement in place to avoid future disputes.

3. Explore First-Time Home Buyer Incentives

If you’re buying your first home, the government offers programs that reduce your upfront costs and improve your eligibility:

• First-Time Home Buyer Incentive: Government offers 5–10% of the home’s purchase price to reduce your monthly payments. You repay this amount when you sell (or after 25 years). Learn more

• RRSP Home Buyers’ Plan: Withdraw up to $35,000 from your RRSP (tax-free) for your down payment

• Land Transfer Tax Rebates: Available in Ontario, BC, and PEI to reduce closing costs

Using these programs can help you afford a better home with a smaller mortgage.

4. Buy a Home in a More Affordable Area

Home prices vary drastically by region. If you’re priced out of your current city, consider nearby towns or rural areas where homes are more affordable.

For example, average home prices in New Brunswick or Saskatchewan can be under $300,000—significantly lower than Toronto or Vancouver.

📌 Pro tip: Look for locations with public transit access, growing job markets, and affordable property taxes.

5. Work with a Mortgage Broker Specializing in Low-Income Buyers

Brokers can help you:

• Access lenders that offer flexible programs

• Navigate the paperwork and approval process

• Compare rates from multiple lenders at once

Some alternative lenders may be more open to low-income applicants, especially if you have good credit and low debt.

6. Use Rental Income or Other Sources of Income

Some lenders will include:

• Rental income from a legal suite or basement apartment

• Child tax benefits

• Spousal or child support payments

• Part-time or freelance work, if consistent

These sources need to be proven through official documentation (bank statements, leases, tax returns).

How Much Income Do You Need to Buy a Home in Canada?

This depends on the cost of the home, your down payment, and existing debts. As a general guide:

• To buy a $400,000 home with 5% down, you’d need about $80,000/year in household income

• With 20% down, you may only need $60,000/year

Use a mortgage calculator with your real numbers to find your budget range. Here's one from WOWA.

What Is the Minimum Income Required to Qualify for a Mortgage in Canada?

There’s no one-size-fits-all number, but here’s a ballpark idea based on 5% down and average interest rates:

Qualifying for a Mortgage with Low Income Is Possible with the Right Plan

Low income doesn’t mean “no mortgage.” It means you’ll need to get strategic.

Here’s a quick recap to help you move forward:

Keep your debt-to-income ratio in check (full guide here)

Strengthen your credit score

Save for a larger down payment

Apply with a co-signer or partner to boost total income

Use first-time buyer programs to reduce upfront costs

Add in alternative income sources like rent or benefits

Explore more affordable housing markets

If you're not sure where to start, working with an experienced mortgage broker can make the process clearer and save you time.

Want help calculating how much you qualify for or comparing lenders? Reach out for a free affordability assessment—we’ll help you map out your path to homeownership.