Short answer
Sometimes. Two years is a common way to show that variable income is stable, but it is not a universal statute. A lender may use a shorter documented history when the income is consistent and well supported, or it may use only guaranteed base pay.
The borrower concern behind the question
Your total earnings support the mortgage, yet the underwriter removes overtime or bonus income and the approved amount drops shortly before the offer deadline.
What the verified guidance says
OSFI says income is central to repayment capacity and expects rigorous, independent verification. It does not prescribe one calculation for overtime or bonuses. Each lender and mortgage insurer defines acceptable history, averaging and supporting documents.
Where lender and insurer policy changes the answer
A recent spike, declining year-to-date earnings, discretionary bonus or employer change weakens the case. Guaranteed shift premiums and scheduled overtime may be viewed differently from optional hours. A tax return proves reported income but not that it will continue.
A practical Ontario example
Illustration only: A skilled-trades employee has 18 months of regular overtime supported by pay stubs, year-to-date totals and an employer letter. One lender may average the documented period; another may wait for two completed years or use base salary only.
What to prepare before the lender reviews the file
Provide two years of T4s where available, current pay stubs, year-to-date totals, the employment letter and an explanation of why the extra income should continue. Compare approval amounts using base pay alone and with the supported variable income before setting the purchase budget.
Questions Rajiv would ask first
- Which part of the income is guaranteed, variable, temporary or expected to change?
- What documents independently confirm the amount and how long it should continue?
- Is the mortgage insured or conventional, and which lender or insurer policy applies?
- Will the income or obligation change before closing or during the first mortgage term?
- What A-lender, alternative/B or short-term fallback remains practical if the first calculation fails?
Rajiv’s broker perspective
Income qualification is rarely solved by naming the benefit or employment type. I would first separate the income you receive today from the income a lender can reasonably document and use. Then I would compare the lender’s calculation with the household’s real after-tax budget. An A-lender exception can be appropriate when the story and documents are strong. Alternative/B lending may accept a wider income view in some cases, but the rate, fee and exit plan must earn their cost. MIC or private lending should solve a defined short-term problem, not hide an income gap that has no route back to sustainable financing.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Updates & Rules Centre
Is your income being misunderstood by the lender?
Send Rajiv the income type, employment history, leave or return date, current documents, purchase or renewal deadline and the lender’s concern. He can identify what is missing, compare practical lender approaches and explain the next step in plain language.