Call Live Support

Private Mortgage Lenders

Fast Private Mortgage Approval

Get Your Free Quote Now
No income or Credit Check

Learn More

Private Mortgages From Direct Private Mortgage Lenders In Ontario & Canada

Over the past number of years with the changes in the real estate market, and changes to regulations for qualifying for a mortgage in Ontario and throughout Canada, an increasing number of homeowners and homebuyers have turned to private mortgage lenders in 2023. It is expected to continue increasing through 2024 and years beyond, since private mortgage lenders make it easier to qualify for a private mortgage in Ontario, Canada. Income and credit are not considered factors for getting approved for a private mortgage from private lenders.

If you’re wondering “What is a private mortgage?”, or “What is a private mortgage lender”, and how to choose the best private mortgage lenders in Ontario and the rest of Canada, we’re here to set the record straight. We’ll show you how to differentiate between a good private mortgage and a less than optimal one? 

If you’re looking for private mortgage lenders in Ontario, here’s what you need to know to find the best deals!

What Is A Private Mortgage?

What Is A Private MortgageA private mortgage can come in a number of different forms. The Motley Fool defines private mortgages as “a private mortgage is a loan created between private individuals for the purchase of real estate. The lender, who could be a friend, family member, colleague, or investment firm, will loan the money to the borrower just as a bank would, securing themselves with a mortgage note or comparable contract.”

Private mortgages are generally granted for 3 reasons: 

  1. As a favor
  2. As an investment
  3. A combination of the two

The terms of a private mortgage are usually negotiated around the length of the home loan, the amount of the down payment, the interest rate, and type of loan. There may be additional rules or laws about the maximum interest rate allowed based on the use of the property. 

Private mortgage lenders can offer a variety of different types of loans. Some of these include: 

  1. Private first mortgage
  2. 2nd mortgage
  3. Bad credit mortgage
  4. Home equity loan

Private mortgage lenders in Canada can be an investment group looking for alternative investments. Private mortgages can be beneficial for borrowers and lenders, alike.

What is a Private Mortgage Lender?

A private mortgage lender is typically not a traditional bank or financial institution, and can be an individual person or private lending company. Private mortgage lenders in Ontario and throughout Canada are not bound by the same strict rules and regulations as the banks. Private lenders have more flexibility in choosing the types of mortgages they want to fund. This flexibility makes them an attractive option for borrowers who may not qualify for traditional mortgages due to their credit score or history, annual income, or the type of property being purchased.

Private mortgage lenders focus more on the value and potential of the property being used as collateral rather than solely on the borrower’s creditworthiness.

The interest rates from private mortgages lenders are typically higher than those from traditional banks, reflecting the higher risk they are willing to take. However, the trade-off is accessibility and speed, as private mortgages can often be arranged much quicker than conventional loans.

How to Choose the Best Private Mortgage Lenders in Ontario

Selecting the right private mortgage lender in Ontario is crucial to ensure you get favorable terms and a smooth lending experience. Here are some key factors to consider:

  1. Reputation and Experience: Look for lenders with a solid reputation in the industry. Check for reviews, testimonials, and case studies. Experienced lenders are more likely to provide reliable and efficient service.

  2. Loan Terms: Examine the terms offered by the lender. This includes interest rates, loan duration, loan-to-value ratio, and any additional fees or penalties. Ensure these terms meet your specific needs and circumstances.

  3. Flexibility: One of the main advantages of private lenders is their flexibility. Assess how willing they are to work with you on the terms of the loan, especially if you have unique circumstances.

  4. Speed of Transaction: If your situation requires quick financing, check how fast the lender can process and approve the loan. Private lenders often provide quicker approvals compared to traditional banks.

  5. Transparency: Ensure the lender is transparent about all aspects of the loan. There should be no hidden fees or unclear terms in the agreement.

  6. Professional Advice: Consider seeking advice from a financial advisor or mortgage broker. They can provide insights into which lenders might be the best fit for your situation.

  7. Local Knowledge: Lenders who are familiar with the Ontario real estate market can offer valuable insights and tailored services that align with local trends and regulations.

By carefully considering these factors, you can make an informed decision and choose a private mortgage lender in Ontario that best suits your financial needs and goals.

How Much Can You Borrow?

Private Mortgage Loan To Value LtvPrivate lender mortgages are often fairly easy to qualify for. Many private mortgage lenders will approve loans with at least 25% available equity. That means any value that doesn’t have any debt against it. For example, a property worth $1 million with a $750,000 mortgage would have 25% equity.

Many private mortgage lenders in Canada will ask that you have a property evaluated as part of the mortgage agreement. Or they could consolidate the assessment fee into the startup fee for your private loan. Getting a current evaluation is an important part of determining the size of the loan you’re eligible for. 

Most private mortgages are given for residential properties. For commercial property mortgages, the equity rate is often a little higher, commonly around 35%. 

This arrangement is part of what makes private mortgages different from a traditional lender. Canadian private lenders usually focus mainly on the current market value of a property and equity when considering approving a loan. Banks, on the other hand, are much more likely to assess credit history as the determining factor in whether or not you qualify for a loan. 

That means if you have credit card debt, you can still qualify to receive a loan from private mortgage lenders for bad credit. 

Private Mortgage Loan-T0-Value (LTV)

Private Mortgage Loan To Value LtvPrivate mortgage lenders use a metric called Loan To Value (LTV) ratio to determine if a property is a worthwhile investment. To determine the LTV, divide the existing mortgages on a property by the market rate. For a property worth $1 million with existing mortgages of $800,000, the LTV would be 80%.

An LTV of 80% or lower is a common private loan requirement. Some private loan lenders will extend a private mortgage for LTVs of 85% to 90% for a refinance. A rate of 80% LTV is common for purchasing a home.

Many private loan providers are interested in solid investments. A high LTV means a borrower already has a large amount of pre-existing loans taken out against their property. In the instance the borrower defaults on their mortgage payments, the primary mortgage lender would be paid back first. Properties with high LTVs are less likely to recoup their investments. 

LTVs aren’t the only criteria that determine private mortgage rates or interest rates. Having a steady income will help you get the best mortgage rate possible, as will having a solid credit score.

Have Questions About Private Mortgages?

Call us today to speak to a licenced mortgage broker.

Advantage Of Private Mortgages

Advantages Of A Private MortgagePrivate lender mortgages can be advantageous for borrowers and lenders alike. They’ve been a popular alternative to traditional mortgages for decades for a number of reasons. 

Private mortgage requirements are much more flexible than those from a traditional lender, whose strict criteria are also known as a stress test. This makes them one of the prime reasons why homeowners get private mortgages. Perhaps you’re in the process of rehabilitating your poor credit, or maybe you’re looking into a private mortgage for debt consolidation

Private mortgages involve less paperwork than traditional mortgages, as well. Private lenders don’t have to deal with large financial institutions than banks do. This also makes them advantageous for people with an unconventional financial situation, such as those who are self-employed or with short credit histories. 

A private mortgage can sometimes feature more beneficial terms than conventional loans, as well. 

It’s usually easier to get approved for a private lender mortgage than a traditional loan. Private lenders are often solely in the business of issuing mortgage loans. This makes it far easier for them to streamline their approval process than traditional banks or money lenders. 

Traditional mortgages are often restricted to a few common forms. This means you’re severely restricted in the terms that are available. Private loans are able to be much more flexible, giving you more options for finding terms that meet your specific needs.  

How To Get The Best Interest Rate For A Private Mortgage

For homeowners aiming to obtain optimal rates from private lenders, meeting certain criteria can significantly elevate the chances of securing favorable terms. By understanding and aligning with these criteria, borrowers can ensure a mutually beneficial agreement between them and the lender.

1. Low Loan-to-Value (LTV) Ratio:

  • The LTV ratio holds paramount significance; a lower LTV denotes less risk for the lender. This implies that the homeowner has substantial equity in the property, enhancing the likelihood of the lender recovering their investment. Lower LTV ratios usually translate to more attractive interest rates for borrowers.

2. Stable and Sufficient Income:

  • Your income level serves as a pivotal factor in determining the interest rate. Demonstrating a stable and sufficient income assures lenders of your ability to meet the repayment obligations, making the loan a secure investment for them. It also possibly enables negotiation for better interest rates due to reduced lending risk.

3. High Credit Score:

  • A commendable credit score, typically 700 or above in Canada, is indicative of financial responsibility and timely bill payments, rendering your private mortgage a secure venture for investors. While a score between 550 and 700 is deemed fair, enabling potential mortgage approval with traditional lenders, it usually attracts higher interest rates.

4. Understanding Credit Scores:

  • Having a clear comprehension of credit score categories is crucial. A score nearing 900 is perceived as perfect, while good credit is generally categorized as 700 or above. Even with fair credit (550 – 700), traditional lenders might extend a mortgage, albeit with elevated interest rates.

5. Advantage of Private Mortgages with Bad Credit:

  • For individuals grappling with bad credit, private mortgages can sometimes unfold more accommodating deals. These lenders often place substantial weight on property equity and income stability over credit scores, offering a lifeline to those who might struggle to secure loans from mainstream lenders.

6. Leveraging Professional Advice:

  • Consulting with a mortgage advisor or a financial expert can provide tailored insights and advice to enhance your eligibility for optimal rates. Their knowledge of the lending landscape and strategic guidance can help navigate through options and negotiate favorable terms, aligning with your financial profile and objectives.

7. Comprehensive Research and Comparison:

  • Engage in meticulous research and comparison of various private lenders, understanding their terms, rates, and conditions. This will empower you to make informed decisions, identify the most advantageous offers, and potentially save thousands in interest over the loan term.

Reasons For Getting A Private Mortgage

There are a wide variety of reasons you might be seeking a private mortgage.


One of the most popular reasons is that private mortgage lenders can be far more lenient than traditional lenders. This means you’re far more likely to qualify for a short term loan in case of unforeseen circumstances such as debt consolidation, to help bring down the balance on high interest credit card bills. 

Home Repairs or Renovations

Seeking home repairs or renovations is another common reason for seeking a private mortgage. Not all mortgages will cover repairs or renovations. You often have to specifically seek out a special type of mortgage, known as a Renovation Mortgage or Renovation Loan.

Unexpected Circumstances

Unforeseen unemployment or unexpected expenses are also common reasons to seek a private mortgage. Private mortgage lenders are often issued for short term loans. They’re also far more commonly available for borrowers with extenuating financial circumstances such as being self-employed or having an imperfect credit history.

Private mortgages can often be approved much more quickly than a more traditional loan. This makes private mortgages far more desirable for those looking for income or a line of credit in a hurry. A private mortgage can even be an investment in and of itself, if you find a particularly good deal your mortgage will help you take advantage of it. 

Avoid Foreclosure or Power of Sale

Private mortgages can help avoid foreclosure or power of sale

It’s not uncommon for people to juggle multiple types of debt in this day and age. Traditional lenders don’t always take this under consideration, however, making it difficult to leverage real estate or home equity to help pay off debt. If you’re smart, you can even use your 2nd mortgage to pay off an existing mortgage and student debt. 

Buying A Home or Investment Property

Getting a private mortgage for buying a home or investment property has become a more common solution for many home buyers and investors in recent years.

Buying a home without the traditional income and credit qualifications of a bank makes it more attractive for homebuyers and investors to get into the real estate market.

There are also private mortgage financing solutions for bitcoin (BTC) and cryptocurrency investors seeking to diversify their investment portfolios. Our private mortgage lenders will finance homebuyers using bitcoin as their source of downpayment.  Buying real estate in Canada using bitcoin is an evolutionary gamechanger in the real estate industry and has created the doorway to making that possible.

What To Look For In A Private Mortgage?

Selecting a private mortgage isn’t that different from choosing a traditional loan. Figuring out how much you can afford, over what period of time, is the first and main concern. Calculating private mortgage lenders rates is easier said than done, however.

A tool like a Home Equity Loan Calculator can help you figure that out.

If you’re seeking a private mortgage for a more specialized need, you can also use specialty tools like a Second Mortgage Calculator.

Once you have an idea of what you can afford, this can help you prepare to seek out the best terms you can find. Saving for a while to make a down payment may help you get a better rate on a private mortgage. This can help you get a better LTV ratio, which can help you negotiate lower interest rates, just like with a traditional mortgage.

These factors can help you determine the optimal criteria for a private lender. Traditional mortgages are almost always long-term, such as the 30 year mortgage.

Private mortgages can come in a variety of lengths, however. Private mortgages can be for as short as 3 months and up to 2 years. Most private lenders offer a 1 (one) year term by default.

All of these factors can help you determine the best interest rate. The interest rate is probably the single most important factor in choosing a mortgage.

Private Mortgage Interest Rates

Interest rates on mortgages are always changing due to market dynamics. To secure the best rate on a private mortgage, monitoring the trends in interest rates can provide valuable insight into the market, aiding in making informed decisions.

Variability in Private Mortgage Interest Rates:

Private mortgage interest rates tend to vary substantially. For first mortgages, the rates typically lie between 6.99% and 13.99%. In the case of second mortgages, interest rates usually range from 7.99% to 13.99%. Utilizing a second mortgage calculator can be immensely helpful in determining your prospective payment and rate.

Role of Loan-to-Value (LTV) Ratio:

The interest rate in private mortgages is significantly influenced by the Loan-to-Value (LTV) ratio. This ratio denotes the relationship between the loan amount and the appraised value of the property involved.

  • High LTV: A higher LTV ratio indicates a larger loan amount compared to the property’s value, usually leading to higher interest rates due to the increased risk perceived by lenders.
  • Low LTV: Conversely, a lower LTV ratio, where the loan amount is a smaller percentage of the property’s value, typically results in lower interest rates due to reduced risk.

For example, if someone is borrowing a significant portion of the property’s value, the lender may charge a higher interest rate to compensate for the heightened risk of loan default.

Understanding the dynamics of private mortgage interest rates and the influential role of the LTV ratio is crucial for anyone considering this financial path. It empowers borrowers to make well-informed decisions, aligning their choices with their financial capacity and goals, while potentially avoiding unfavorable terms and undue financial strain.

Why Choose A Private Mortgage from a Private Mortgage Lender?

Choosing a private mortgage can be a great decision for many folks, especially when traditional banks say no! Here’s why private mortgages are often a go-to choice.

1. Easy to Get:

  • Not So Strict: Unlike banks, private lenders aren’t too strict. They don’t have tough rules and are usually willing to work with you even if your financial situation isn’t perfect.
  • Quick Approval: Since private lenders only do mortgage loans, they are faster and less complicated in approving loans compared to banks.

2. Flexible Rules:

  • Less Paperwork: Going for a private mortgage usually means less paperwork and hassle. It’s way more straightforward and easier to handle than dealing with big banks.
  • Works for Everyone: Whether you work for yourself or have a short credit history, private mortgages can work for you! They’re great for people whose financial situations are a bit different.

3. Better Terms:

  • Good Deals: Sometimes, private mortgages can offer better deals and terms than regular loans.
  • Made Just for You: Private mortgages give you the freedom to find a deal that suits you best. They’re not one-size-fits-all, so you can get terms that match your needs.

4. Helps When You Have Bad Credit:

  • Credit-Friendly: Got poor credit? No worries! Private mortgages can still work for you. They can be a lifeline when you’re working to make your credit better.
  • Debt Solution: If you’re looking to put all your debts together into one, private mortgages can help with that too!

5. Lots of Options:

  • Variety of Choices: Unlike traditional mortgages which are usually pretty limited, private loans offer lots of different options, allowing you to choose what’s right for you.
  • Creative Solutions: Private mortgages let you explore different and creative ways to solve your financial needs.

Private Mortgage Lenders for Home Purchase

Max LTV: 80%

Purchasing a home is one of the most significant financial decisions most people make. When traditional mortgage options don’t align with your financial situation or needs, a private mortgage serves as a compelling alternative. The maximum Loan-to-Value (LTV) for a home purchase, including pre-construction or newly built homes, stands at 80%. This can be an attractive option for many prospective homeowners for several reasons:

Key Factors for Approval

  1. Equity-Centric: Unlike traditional mortgage loans that heavily weigh credit scores and income, private mortgages place a greater emphasis on the property’s equity.
  2. Asset-Based Lending: This form of lending focuses on the value of the property you’re buying rather than your ability to repay, making it easier for people with non-traditional income to get approved.
  3. Short-Term Option: Private mortgages are often designed as short-term solutions, ideal for buyers who plan to refinance or sell in the near future.

Advantages of Opting for a Private Mortgage for Home Purchase

  1. Quick Approval:

    • Time-Sensitivity: In a hot real estate market, quick approval can be the difference between securing and losing a property.
    • Streamlined Process: With less bureaucracy, the entire mortgage process from application to approval is generally faster.
  2. Flexible Terms:

    • Customizable Repayment Plans: Many private lenders offer repayment structures that traditional lenders can’t match.
    • No Prepayment Penalties: The terms might allow for more flexibility in early repayments, offering borrowers more control over their financial plans.
  3. Portfolio Diversification:

    • Investment Strategy: Investors can also use private mortgages to diversify their property portfolio, especially when they may not meet the stringent requirements of traditional lenders.
  4. Limited Documentation:

    • Less Paperwork: The application process is generally less cumbersome, requiring fewer financial documents, which can be particularly beneficial for self-employed individuals or those with complex income streams.
  5. Privacy:

    • Discretion: Private lenders often provide a more confidential process, which some buyers might find appealing.

Private Mortgage Refinancing

Max LTV: 85%

Refinancing an existing mortgage presents a unique set of opportunities and challenges. Opting for a private mortgage in this scenario can provide advantages that traditional lenders may not offer. With a maximum Loan-to-Value (LTV) ratio of 85%, private mortgage refinancing allows homeowners to unlock a larger portion of their home’s equity.

Key Factors for Approval

  1. Higher LTV: With a maximum LTV of 85%, you can tap into more equity, providing you with greater financial flexibility.
  2. Asset-Centric: Similar to private mortgages for home purchases, refinancing options also hinge on the home’s equity, not merely on your financial standing.
  3. Term Flexibility: Private mortgages offer both short-term and long-term refinancing options, from 3 months to 4 years to meet different financial objectives.

Advantages of Private Mortgage Refinancing

  1. Debt Consolidation:

    • Reduced Financial Burden: A higher LTV enables you to consolidate more debts into a single payment, often with a lower interest rate.
    • Streamlined Finances: Merging various debts into one can make financial management easier.
  2. Home Improvement:

    • Increased Home Value: Utilize the funds to carry out essential home renovations that can increase your property’s value.
    • Upgrades and Repairs: Create a more comfortable living space by fixing existing issues or adding new features.
  3. Cash Flow Management:

    • Financial Leeway: By refinancing, you could potentially lower your monthly payments, increasing cash flow for other investments or needs.
    • Fund Opportunities: Unlock funds for investment opportunities or to meet unexpected expenses.
  4. Lender Diversity:

    • Multiple Options: A variety of private lenders offer refinancing, giving you a chance to shop for the most favorable terms.
  5. Fast Approval:

    • Quick Access to Funds: Speedy approval processes mean you can get the funds you need more quickly than with traditional lenders.

Private 1st Mortgage vs. Private 2nd Mortgage

Understanding the hierarchical difference between a private 1st and a 2nd mortgage is particularly vital due to their charge rank.

Private 1st Mortgage

The private 1st mortgage serves as the primary loan secured against your property and is generally the most substantial loan a borrower will take out, as the amount is usually higher than a 2nd mortgage. Most lenders prefer to hold the 1st mortgage position due to its lower associated risk. In case of a default, the 1st mortgage lender has the primary claim to the proceeds from the property’s sale. They are ‘first in line’ during any foreclosure or liquidation process, giving them a stronger legal standing. Because of these factors, the 1st mortgage generally offers lower interest rates, translating into lower monthly payments for the borrower and substantial savings over the lifespan of the loan.

Private 2nd Mortgage

The private 2nd mortgage is a loan that takes a subordinate position to the 1st mortgage. While the 1st mortgage serves broader, more general financial needs, the 2nd mortgage often has a more specific, targeted purpose such as home improvements or debt consolidation. If the borrower defaults, the 1st mortgage needs to be entirely paid off before the 2nd mortgage lender can claim any remaining proceeds from property liquidation. This lower priority makes the 2nd mortgage a riskier proposition for lenders. As a result, the 2nd mortgage usually comes with higher interest rates, leading to higher monthly payments and a more expensive loan over time.

Key Takeaways

  1. A private 1st mortgage is generally safer for the lender, usually resulting in lower interest rates for the borrower.
  2. A private 2nd mortgage is riskier for lenders due to its subordinate position in the hierarchy, typically commanding higher interest rates as a consequence.

How To Get A Private Mortgage From Private Mortgage Lenders

Private mortgages require far less documentation than traditional loans. Equity is the thing most private mortgage lenders are concerned with. For a refinance or cash out, mortgage lenders will need to see what kind of assets you’re bringing to the negotiations. Many private lenders will want up to 35% equity for refinancing loans. 

For fixer-uppers and properties intended to be flipped, many lenders will want to see that the after-repair value will yield at least 35% equity.

Your credit score isn’t a factor in securing a private mortgage. Having a good credit score or solid credit history may help you secure a better rate for your loan, however. You’ll want to bring some proof of credit and income when securing a private mortgage. 

Many private lenders will ask to see three months worth of bank statements as evidence of your financial history. For commercial properties, lenders may want to see a rent roll to help determine your ability to make your interest payments. 

For a fix and flip rehab project, lenders may want to see if you have some sort of resources, even if they’ll be bankrolling most of the project. This is in case the project goes over budget. 

Private mortgages can be a lifeline in times of economic uncertainty. They can also help you take advantage of the earning and investment potential of properties you already own, or help you get started investing in real estate.

If you’re seeking a private mortgage in Ontario or the surrounding area, contact us today with any questions or to set up an appointment. 

Low Interest Rates


Low rates and flexible terms from direct lenders.

Fast Approval &Amp; Closing


Fast mortgage approval and closing in 24 to 48 hours.

Bad Credit Approved


Credit is not a factor for getting approved for a private mortgage.

No Income Verification


Income verification is not required for private lenders.

Approved On Equity


Fast mortgage approvals based on equity only.

Get Your Free Quote Now
No income or Credit Check

Private Mortgage Process From Direct Private Mortgage Lenders In Ontario and All of Canada

Private mortgage lenders approved private mortgages in Canada based on equity only. There are no income or credit qualifications required.

Free Mortgage Quote

Get Your Private Mortgage Quote

Get your free Private Mortgage Quote

House Checkmark

Confirm Property Details

Confirm property value and current mortgage details.

Receive Money

Fast Closing Your Private Mortgage

Close on your Private Mortgage in just 48 Hours

Why Choose Us For Your Private Mortgage?

Why Mortgage Commitment?

Canadian Money
Hand House Reflect

We take pride in taking the time and effort to match up every individual homeowner and homebuyer with the best mortgage financing options and rates. With access to more than 200 participating mortgage lenders, there are mortgage solutions for all types of borrowers. We listen and understand your mortgage and real estate goals, and find the best mortgage terms tailored to your specific goals to save you thousands of dollars on your new mortgage.

All Equity Mortgage Solutions In One Place

People Handing Money

Get Your Free Private Mortgage Quote Today

(No Obligation)