The client
A commercial fishing licence-holder near Bathurst, working two deckhands under a standard crew-share arrangement. Gross vessel catch revenue reached $128,000 and $145,000 across two seasons — but a meaningful share of every dollar deposited into the vessel's account was never personally his. His spouse works part-time. He wanted to buy a $235,000 home at 10% down.
Borrower
Commercial fishing licence-holder
Two deckhands under a crew-share arrangement
Gross catch revenue
$128,000 then $145,000
Across two documented seasons
Operating costs
$50,000 then $55,000
Fuel, bait, ice, vessel maintenance
Licence-holder's share
60% of net proceeds
Illustrative crew-share contract
Spouse's income
$1,200/mo (part-time)
New purchase
$235,000, Bathurst
Property tax $210/mo; lender-standard heat $100/mo
From gross catch to personal income, both seasons:
| Season | Gross catch | Operating costs | Net proceeds | Personal share (60%) |
|---|---|---|---|---|
| Year 1 | $128,000 | $50,000 | $78,000 | $46,800 |
| Year 2 | $145,000 | $55,000 | $90,000 | $54,000 |
The problem
The gross deposits into the vessel's business account — $128,000 and $145,000 across two seasons — include two deckhands' contracted crew shares, money that flows through the licence-holder's books on its way to the crew but is never personally his. Used as-is, gross revenue would badly overstate his personal income; ignored without a proper netting-out, the file simply could not be assessed at all.
Why gross catch revenue could not be used directly
- ▸Gross catch revenue, Year 2: $145,000.
- ▸Fuel, bait, ice and vessel operating costs: $55,000, leaving net proceeds of $90,000.
- ▸Of that, the licence-holder's contracted personal share is 60% — $54,000. The remaining 40% belongs to the two deckhands under their crew-share agreement.
Every commercial fishing file with crew runs this same risk: the personal T1 line is correct once operating costs and crew shares are properly deducted, but the underlying bank deposits look far larger, and a lender working from deposits alone — rather than the actual net income line — risks a badly overstated qualifying figure.
The numbers
At 10% down this is an insured file, so CMHC's 39%/44% caps apply directly.
| Structuring the insured loan | Amount |
|---|---|
| Purchase price | $235,000 |
| Down payment (10%) | −$23,500 |
| Base mortgage (90% LTV) | $211,500 |
| CMHC premium — 3.10% in the 85.01–90% LTV band, capitalized | +$6,556 |
| Total insured mortgage | $218,056 |
| Rate & payments | Figure |
|---|---|
| Contract rate — 5-year fixed (illustrative, not a quote) | 4.99% |
| Minimum qualifying rate — contract + 2% | 6.99% |
| Monthly P&I at the qualifying rate — the ratios run on this | $1,526 |
| Monthly P&I at the contract rate — what he actually pays | $1,267 |
GDS and TDS on the netted-out personal share
| GDS | Monthly |
|---|---|
| P&I at the qualifying rate | $1,526 |
| Property tax | $210 |
| Heat (lender-standard estimate) | $100 |
| Housing $1,836 ÷ income $5,400 (personal share + spouse) → GDS 34.0% | ✓ |
Once fuel, bait, ice and vessel costs are backed out and the crew's contracted share is removed, the two-year average of $4,200/mo is a documented personal income, exactly the discipline how Canadian lenders actually read self-employed business income requires for any self-employed file with pass-through costs.
The solution
A mortgage broker licensed under New Brunswick's FCNB rebuilt the income calculation from gross catch revenue down to a defensible personal figure.
First, backed out fuel, bait, ice and vessel operating costs for both seasons, arriving at net proceeds of $78,000 and $90,000 — the amount actually available to split between the licence-holder and his crew.
Second, applied the crew-share settlement sheets showing the licence-holder's contracted 60% share, isolating $46,800 and $54,000 as his personal income each season, averaged to $4,200/mo across both years.
Third, corroborated both seasons as genuine and recurring with vessel logs and landing/quota records, so the underwriter could see the pattern was an ordinary two-season history, not a one-off good year mixed with an unrepresentative one.
The outcome & the closing math
Approved and funded insured at 90% LTV, 25-year amortization, 5-year fixed term.
| Cash due at closing (beyond the down payment) | Amount |
|---|---|
| New Brunswick's flat 1% real property transfer tax on $235,000 | $2,350 |
| Legal fees, title insurance & adjustments | varies |
New Brunswick's transfer tax is a flat provincial rate on the greater of the sale price or assessed value, unlike Nova Scotia's municipally-set deed transfer tax next door.
What to take from this file
- 01Gross deposits are not personal income on any file with crew, partners, or pass-through costs. Back out operating costs and any contracted third-party share before averaging.
- 02Crew-share settlement sheets turn a private arrangement into documented, verifiable income splitting. Without them, the personal share is an assertion, not a number.
- 03Vessel logs and landing records corroborate that a season was genuine and recurring, not a single good year that happens to be the most recent one.
- 04New Brunswick's transfer tax is flat and provincial — no municipality-by-municipality lookup is needed, unlike Nova Scotia's deed transfer tax.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸CMHC — Purchase (Mortgage Loan Insurance) — default-insurance premium schedule by LTV band (25-year amortization).
- ▸CMHC — CMHC Home Start — minimum down payment tiers (5%/10%) and the $1.5M insured price cap.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸CMHC — CMHC Reviews Underwriting Criteria — GDS 39% / TDS 44% maximums and the 600 credit-score floor for insured files.
- ▸Real Property Transfer Tax Act, S.N.B. (via laws.gnb.ca) — New Brunswick's flat 1% real property transfer tax.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸4.99% contract rate — rates move daily; not a quote.
- ▸the 60% license-holder share — crew-share splits are set by private contract between the licence-holder and crew, and vary by vessel and season.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.