Private Mortgage Lenders in Canada: Rates, Fees and When a Private Mortgage Makes Sense
Private lending is equity lending: the property matters more than the borrower. Expensive, fast, and short-term. Here is what it costs in Canada and when it is the right answer.
Who a private mortgage lenders covers
- Borrowers declined by both A and B lenders
- Files needing to close in days rather than weeks
- Owners with strong equity and a genuinely temporary problem — arrears, a tax lien, an unfinished renovation
What lenders look for on a private mortgage lenders file
| Equity first | Most private lenders want 20% to 35% equity and care far more about the property than the income or the score. |
| Lender and broker fees | Both are normal here, typically 1% to 3% each, deducted from the advance. They should be quoted in writing before you commit. |
| Short terms | Six to twelve months is standard. A private mortgage is a bridge, and it should be arranged with a stated exit. |
| Interest only | Almost always. The balance does not reduce. |
Private Mortgage mortgage rates: what it costs
Private mortgages in Canada generally run well into double digits once fees are counted. The right comparison is not against a bank rate but against the cost of the problem being solved.
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Private Mortgage by province
Land transfer tax, minimum down payment and typical prices differ by province.
Private Mortgage mortgage questions
How much does a private mortgage cost?
Rates well above prime lending, plus lender and broker fees of roughly 1% to 3% each. On a one-year term the effective cost is materially higher than the quoted rate, so ask for the all-in figure.
Is private lending safe?
The lending itself is regulated and the mortgage is a normal registered charge. The risk is entering one without an exit — a private mortgage with no plan to refinance out becomes very expensive very quickly.
How fast can it close?
Days rather than weeks, which is often the entire reason for using one. Speed is what you are paying for.
Have a private mortgage file looked at
When you are ready to do something with these numbers, we will introduce you to a licensed broker who can put the file in front of lenders. Nothing here obliges you to.
