When does a private mortgage make sense in Canada?

A private mortgage makes sense when borrowers need fast financing, have bruised credit, are self-employed without strong income documents, or require funds for renovation, debt consolidation, or paying CRA arrears.

Are private mortgage rates higher than bank rates in Canada?

Yes. Private mortgage rates are higher because lenders take on more risk and offer flexible approvals. Rates typically start around 8–12% in Canada, depending on equity, property type, and location.

How do I qualify for a private mortgage in Canada?

Qualification is based mainly on the property's loan-to-value (LTV). Most private lenders approve up to 75–85% LTV in major cities. Credit score matters less than equity and a strong exit strategy.

What LTV do private lenders allow in Ontario?

In Ontario, private lenders typically allow 80–85% LTV in the GTA, 75–80% in mid-size cities, and 65–75% in rural areas. Equity and property location are key approval factors.

How fast can I get a private mortgage in Ontario?

Ontario private mortgages can fund as fast as 24–72 hours, especially in the GTA. They are ideal for urgent closings, CRA arrears, or debt consolidation needs.

What are typical private mortgage fees in Ontario?

Typical Ontario private mortgage fees include lender fees (1–3%), broker fees (1–2%), legal fees ($1,200–$2,000+), and appraisal fees ($400–$650). Actual costs vary by property and complexity.

Can I use a private mortgage for debt consolidation in Ontario?

Yes. Many Ontario homeowners use private mortgages to consolidate credit card debt, personal loans, or CRA balances. Because approvals are equity-based, borrowers with low credit can still qualify.

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What Is a Private Mortgage and When Does It Make Sense?

A plain-language guide to understanding private mortgages in Canada and it's ideal candidates.

Welcome to the MyRealEstateCalculator.ca blog — your national hub for mortgage insights, personal finance guidance, and real-estate calculators. Browse this guide to understand your options, then run the numbers using our free tools before you make any decisions.

If a big bank turns you down for a mortgage, you still have options. A private mortgage can be a helpful solution when your situation doesn’t fit the bank’s rules.

A private mortgage is a home loan from a private lender—this could be an individual, a group of investors, or a mortgage company. Instead of focusing only on your income or credit score, private lenders look mainly at your home’s value and the equity you have in it.

When a Private Mortgage Makes Sense

Private mortgages can be a smart choice when:

You’re self-employed and can’t show steady income on paper.
You need to buy or refinance quickly—for example, to stop a power of sale or grab an investment opportunity.
You want to consolidate debt or rebuild credit after tough times.
The bank says “no,” but you still have good equity in your property.

Why People Choose Private Mortgages

Private mortgages are usually short-term—often 1 to 3 years—and are designed to help you move forward until you qualify for a regular bank mortgage. They’re known for fast approvals, flexibility, and custom solutions that banks can’t offer.

While the interest rates may be higher, many homeowners use a private mortgage as a bridge loan to reach their next goal.

If you’re wondering whether a private mortgage could help you, talk to a licensed mortgage agent who works with both traditional and private lenders. The right plan can help you secure funding, protect your property, and create a path toward long-term stability.

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Frequently Asked Questions

Common questions Canadians ask about this topic, answered in plain language.

A private mortgage in Canada is a short-term loan provided by an individual lender, mortgage investment corporation (MIC), or private lending company instead of a bank. Approval is based primarily on property value and equity rather than credit score or income documents, making it useful for borrowers who don’t fit traditional lending guidelines.

A private mortgage makes sense when you need fast financing, have bruised credit, are self-employed without strong tax documents, or need funds for renovation, debt consolidation, or paying CRA arrears. It’s also used when a bank declines a mortgage or when the borrowing timeline is tight (such as closing in 3–10 days).

Yes. Private mortgage rates are higher because the lender is taking on more risk and offering flexible approval with fewer documents. Rates typically start around 8%–12% with fees, depending on property type, equity, and location.

Qualification is mainly based on the property’s loan-to-value (LTV). Most private lenders approve up to 75%–85% LTV in major metro areas. Credit score and income matter less, but lenders still review the exit strategy—how you plan to repay the mortgage (refinance, sell, or improve finances).

What Is a Private Mortgage and When Does It Make Sense?

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