How Falling Rates Open Doors for Gig Workers, Mortgages for Non-Traditional Incomes
After several policy cuts, the Bank of Canada’s overnight rate sits at 2.25% as of October 29, 2025, down from 3.00% in January. This easing has lowered borrowing costs and improved home affordability for many buyers, including freelancers and gig workers who have struggled to qualify in recent years.
What the rate cuts really change
Lower interest rates flow through to fixed and variable mortgage pricing, which can reduce the stress on monthly payments. Even with the drop, borrowers still need to pass Canada’s minimum qualifying rate that remains the greater of the contract rate plus 2% or 5.25% for uninsured mortgages. That rule continues to govern how banks test affordability, so clients benefit from lower contract rates, but must still meet this buffer.
Why this matters for gig-economy buyers
Income for gig and self employed workers often fluctuates from month to month. When rates fall, two things help:
- Lower payments, which improve debt-service ratios.
- More competitive pricing, which can make a borderline file work once strong documentation is in place.
Canada’s gig and self-employment footprint is significant, with recent research highlighting the need for financing pathways that reflect modern earning patterns.
How lenders actually assess non-traditional income
Most mainstream lenders look for stability and a track record. A common approach is to average two years of self-employed income using T1 Generals and Notices of Assessment, along with business statements and, where relevant, T2125 forms. It will be helpful to have the following documents available.
- Business financial statements and recent bank statements
- T1 Generals and Notices of Assessment for the last two years
- Statement of Business or Professional Activities, T2125 when applicable
- Proof of active contracts or retainers, invoices, and receivables logs
- A short, factual income narrative that explains seasonality and trends
The stress test today, and what could change
For now, the stress test rule for uninsured mortgages is unchanged. There has been policy discussion about supplementing or replacing parts of the test with loan-to-income style measures in the future. If adopted, that would adjust how lenders look at higher leverage files. It is a space to watch, but nothing has replaced the current qualifying rate at the time of writing.
Actionable steps for gig-economy clients in a falling-rate window
- Get a quick affordability check under the current qualifying rate
- Build a clean 24-month income story
- Stabilize your cash flow on paper
- Track expenses and add-backs carefully
- Keep a liquidity buffer
- Consider the product mix
- Mind the renewal math
Bottom line for clients
Falling rates have created a more forgiving backdrop, but documentation still decides outcomes for gig-economy borrowers. If you collect the right records, keep your cash flow steady on paper, and choose the right lender channel, you can turn flexible income into a strong approval profile under today’s rules. Start with a pre-approval that uses the current qualifying rate, then build your file toward the clearest 24-month story you can present.
By Jason Woods
jason-woods.com
289-925-9599
