Non-taxable income earners in Canada eligible for special mortgage terms

For borrowers with non-taxable income, lenders may now gross-up this income for the purpose of mortgage qualifying. Some examples of non-taxable include are foster care, ministry work, non-taxable pension, and Indian Act Exemption for employment income.

• Borrowers with non-taxable income less than $30,000, are eligible to have their entire non-taxable income grossed-up by 25%
• Borrowers with non-taxable income of $30,000 or more, are eligible to have their entire non-taxable income grossed-up by 35%

Gross Up Mortgage Example:
Mr. Smith takes care of two foster children and receives $36,000 a year tax-free.

Borrower(s) non-taxable income * Gross-up factor = Grossed-up income
$36,000 * 1.35% = $48,600 (Total Grossed-up Income)