The T5013 that looked like no income at all

A T4-only underwriter reading the file at a glance could easily misfire in either direction: treat the T5013 income as unstable self-employment income needing steep discounting, or worse, not know how to average it at all because there is no business to run financial statements against — the partnership itself is a large firm, not a two-person operation the client controls. Neither the sole-proprietor T2125 approach nor a simple T4 read fits.

The correct treatment sits closer to how lenders handle Notice of Assessment-verified professional income generally: average two years of the actual allocation as reported on the personal return, verified against the NOA, without requesting corporate financial statements the partner has no authority to produce on her own. The firm's overall financials are not hers to disclose, and no lender should be asking a minority equity partner for them.

Getting this treatment wrong in either direction — discounting the income as if it were volatile self-employment, or refusing to average it at all — would have either killed an otherwise strong file or approved it on an unrealistically high single-year number that ignored the normal firm-to-firm variability of partnership draws. Files like this are a growing part of what brokers see rather than banks, consistent with the steady climb in broker market share among professional and self-employed borrowers whose income doesn't fit a T4 template.

The instinct to treat any non-T4 income the same way is understandable — most self-employed underwriting training focuses on sole proprietors and incorporated owner-operators, where the borrower controls the entity and can produce its financials on request. A minority equity partner in a large professional firm sits in neither category. She has no authority to disclose the firm's books, no ability to influence this year's allocation the way a sole owner can time a bonus, and no T2125 to file because the partnership itself files the return. Recognizing that the correct comparison point is Notice-of-Assessment-verified personal income, averaged over two years, rather than either the T4 or the sole-proprietor playbook, was the single decision that kept this file moving instead of stalling on a documentation request the client could not fulfill.

The averaging itself is simple arithmetic once the right two figures are in hand.

At 12% down on $685,000, the loan sits at 88.0% LTV — inside the 85.01–90% CMHC premium band.

Quebec applies its own 9% tax on insurance premiums — including default insurance — separate from the LTV-band premium itself. On the $18,687 premium, that adds $1,682 in cash due at closing; the tax is legislated to rise to 9.975% starting January 1, 2027, but that increase does not apply here.

GDS and TDS at the qualifying rate

Both ratios pass under the insured maximums, but with less margin than a comparably-priced T4 file might show — a direct consequence of averaging two years rather than annualizing the most recent, higher year. That conservatism is precisely what makes the file defensible to the insurer.

An AMF-licensed Quebec mortgage broker (courtier hypothécaire) did three things to get the income treatment right the first time.

First, identified the correct income category before shopping the file. T5013 partnership income is neither T4 salary nor sole-proprietor business income, and pitching it as either to the wrong lender risks an unnecessary decline. The broker confirmed with the target lender's underwriting desk, in advance, that a two-year NOA-verified average — the same discipline our two-year average walkthrough sets out for any unincorporated or partnership file — was their standard treatment for law-firm and accounting-firm equity partners.

Second, sourced the right documents — and only the right documents. Two years of T1 Generals, the T5013 slips themselves, and matching NOAs were sufficient; no firm financial statements were requested, since the partner has no legal standing to produce them.

Third, packaged the averaging math up front so the underwriter saw the two-year calculation before asking for it, alongside a short cover letter explaining, in plain terms, why partnership allocations vary year to year in ways that do not signal instability the way a declining sole-proprietor income might.

Approved and funded insured at 88% LTV on a 25-year amortization. The partner's income was accepted at its correct two-year average without a single request for firm-level financial statements — exactly the outcome the right documentation package was built to produce.

Neither tax could be added to the mortgage itself — both are cash obligations confirmed with the notary before the closing date.

• 01T5013 partnership income is its own category — not T4 salary, not sole-proprietor business income. Confirm the lender's actual treatment before submitting rather than assuming either standard applies.
• 02A minority equity partner cannot and should not be asked for firm financial statements. Two years of T1s, T5013 slips and NOAs is the right documentation set.
• 03Two-year averaging is conservative by design. It smooths a rising income and produces tighter ratios than a single strong year would — expect less margin than a comparable T4 file.
• 04Quebec taxes the insurance premium itself, separately from the premium's LTV-band rate. Budget the 9% tax on the premium as cash at closing, distinct from the land transfer duty.