Private Mortgage Calculator Canada 2024

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The most common maximum loan-to-value (LTV) for a private mortgage is 75% and 80%, however, some private lenders may even lend to an LTV of up to 90% or 95% for private second mortgages. Different private mortgage lenders have different maximum loan-to-valueratios that they will lend out.

If you’re looking to get a private first mortgage, the maximum amount that you can borrow is based on your home equity. This would simply be the value of your home. You would then multiply this by the maximum LTV that your lender offers. For example, if you have a home valued at $500,000 with no current mortgage or other loans secured against your home, then with a private lender with an LTV of 80%, you can borrow up to $400,000.

If you have existing loans or mortgages secured against the home, you’ll need to subtract that first from your home equity. This would give you the additional amount that you can borrow on top of your existing debt secured by the property.

If you currently have a mortgage and are looking to get a private first mortgage, then you would have to pay off your current mortgage with the new private mortgage. For example, let’s say you have a home valued at $500,000 with a mortgage of $200,000. With an LTV of 80%, you can borrow $400,000, however $200,000 of that would go towards your current mortgage to pay it off. You would then have $200,000 in cash leftover.

If you currently have a mortgage and are looking to get a second mortgage, you would keep your first mortgage intact. You will simply borrow funds from the second mortgage in addition to your current mortgage.

For example, a home valued at $500,000 has a first mortgage of $200,000. A private lender is offering you a second mortgage for an LTV of 85%. The amount that you can borrow with your second mortgage would still be $225,000 (($500,000 x 0.85) - $200,000). However, the difference is that you are able to borrow money without touching your first mortgage. private lender is offering you a second mortgage for an LTV of 90%. The amount that you can borrow with your second mortgage would be $250,000 (($500,000 x 0.90) - $200,000). In addition to a higher LTV, you will also be able to borrow money without touching your first mortgage.

To see a list of private mortgage lenders in Canada, their rates, and their maximum LTVs, visit our private mortgage lenders rates page.

Most private mortgages are interest-only. This means that you only need to make interest payments throughout your private mortgage term. Once your term is over, you will still owe the same amount of principal as when you first began, as no principal payments are made.

Private mortgages have short terms, commonly 1 or 2 years. While interest-only private mortgages have a lower monthly cost, their rates can be significantly higher than mortgage rates offered by traditional lenders. This means that private mortgages are usually only used as a temporary measure while a borrower works to improve their credit score or finances.

Let’s say that you are a homeowner in Toronto with a sizable amount of home equity, but you currently have a mortgage from a major bank. You would like to borrow $200,000 for one year to do some renovations, consolidate debt, and to travel. You go to a private mortgage lender in Toronto that offers a rate of 10% for a private second mortgage, excluding fees.

The total interest cost of this private mortgage would be $20,000 for the year ($200,000 x 0.10).

The monthly cost of this private would be $1,667 per month ($20,000/12 months).

At the end of one year, you would still owe $200,000. The payments that you made went towards interest, not the principal.