Private Mortgage Calculator Canada 2021

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A private mortgage is a short-term mortgage lent out by alternative mortgage lenders. Private mortgages usually have higher interest rates compared to mortgages from traditional lenders. Find out how much you can borrow and how much a private mortgage would cost with the private mortgage calculator below.
Private Mortgage
Estimated Home Value
Current Mortgage Balance
Balance of other loans secured by your home
Type of mortgage
1st Mortgage
2nd Mortgage

This value is 85% of the value of your home subtracted by your current mortgage and other secured loans. Some private lenders may have higher or lower limits.

You can borrow up to
I want to borrow:
Your monthly payment for an interest-only private mortgage of
Modify your payment by selecting from top lenders:
*Note: These interest rates do not include the entire cost of borrowing a private mortgage. Fees and other costs will increase the cost of borrowing. When comparing private lenders, the APR should be used as it includes all costs. The interest rates shown are the latest published rates by the listed private lenders.

How much can I borrow with a private mortgage?

The most common maximum LTVs is 75% and 85%, however, some private lenders may even lend to an LTV of up to 95%. Different private mortgage lenders have different maximum loan-to-value ratios 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 85%, you can borrow up to $425,000.

Private First Mortgage

If you currently have a mortgage and are looking to get a private first mortgage, then you would have to pay off your mortgage with the 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 85%, you can borrow $425,000, however $200,000 of that would go towards your current mortgage to pay it off. You would then have $225,000 in cash.

Private Second Mortgage

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.

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

How much would a private mortgage cost?

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.

What is an interest-only mortgage?

An interest-only mortgage will require only interest payments for the entire term of the mortgage. Since you will not be making any principal payments, your principal will remain the same at the end of your term. This means that your monthly payments will be smaller, but you will not be making any progress in paying down your mortgage.

Calculating interest on a private mortgage

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 7% for a private second mortgage, excluding fees.

The total interest cost of this private mortgage would be $14,000 for the year ($200,000 x 0.07).

The monthly cost of this private would be $1,167 per month ($14,000/12 months).

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

The calculators and content on this page are provided for general information purposes only. WOWA does not guarantee the accuracy of information shown and is not responsible for any consequences of the use of the calculator.