Private Mortgage Lenders in Canada

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Private mortgage lenders are mortgage investment corporations (MICs), private lending companies, and even individuals who lend their own capital rather than using customer deposits like banks do. In practice, private lenders usually offer shorter-term mortgages with higher rates and fees than traditional lenders, in exchange for being more flexible in how they assess an application.

Private lenders are commonly used when a borrower does not qualify with a bank, needs funding quickly, wants to access home equity, or needs a temporary mortgage before refinancing, selling, or moving back to an A lender or B lender. Since private mortgages cost more than banks, they are generally best used as a short-term solution rather than a long-term mortgage strategy.

Private Mortgage Lenders Across Canada

Private mortgage lenders play an important role in Canada's mortgage market by serving borrowers who fall outside traditional lending guidelines, and they have become an increasingly common choice for homeowners. You can find private lenders across Canada, although they are most active in major urban markets in parts of Ontario and British Columbia.

Private mortgage lenders differ widely in the types of deals they fund. Some focus on first mortgages, while others specialize in second mortgages, bridge financing, debt consolidation, or higher-risk files. When comparing private lenders, it's important to look beyond the advertised interest rate and consider fees, max LTV, property type restrictions, term length, whether payments are interest-only, and how quickly the lender can fund.

Use the table below to compare the best private mortgage rates in Canada by credit score:

Why should I consider a private mortgage lender?

A private mortgage lender may be worth considering if a bank has declined your application, if you need financing quickly, or if your income, credit, or property does not fit conventional lending rules. If you have a low or subprime credit score below 600, you will likely need a private lender.

Private mortgage lenders may be a fit for borrowers who:

• have bad credit or recent missed payments
• are self-employed or have irregular income
• rely on foreign income or have limited Canadian credit history
• need quick short-term financing while they refinance or sell

Private mortgages are usually more expensive than bank mortgages, so they work best when there is a clear plan to exit the loan within a short period. Before taking a private mortgage, it's important to understand not only the interest rate, but also the lender fee, broker fee, legal costs, and total cost of borrowing.

Who can private mortgage lenders help?

Private mortgage lenders help borrowers who have equity in their property but do not fit the approval criteria used by banks and many B lenders. In many cases, the lender is more concerned with the value of the property, the total loan-to-value ratio, and how the mortgage will be repaid than with a perfect credit score or standard employment history.

New Immigrants

As Equifax and TransUnion only collect credit information within Canada, those with a foreign credit history may have to start from scratch. Some lenders may provide exceptions, and may even offer special newcomer mortgages to help new immigrants qualify for a mortgage. Another hurdle that newcomers to Canada might face is having a limited Canadian employment history.

Self-Employed/Irregular Income

Banks often require two years of employment history to prove that they have a steady source of income. Getting a self-employed mortgage presents challenges, such as if your income is not steady and fluctuates significantly. This especially impacts those whose income is based on commission or tips.

Foreign Income

Those with foreign income may also find it more difficult to qualify for a mortgage, especially if it is not easily verifiable or recognized, and banks may require a much higher down payment.

Private Mortgage Lenders vs Banks

A lenders, such as Canada's Big Six Banks (RBC, TD, Scotiabank, BMO, CIBC, and National Bank), usually offer lower mortgage rates and lower fees than private lenders, but they also have stricter approval requirements. A bank will look closely at your credit score, income documentation, debt ratios, employment history, and ability to pass the mortgage stress test. If you do not meet those requirements, the bank may decline your application even if you have strong home equity.

Private mortgage lenders are different. They often move faster and can be more flexible with bad credit, non-traditional income, or urgent funding needs. In exchange, borrowers pay a higher rate and higher fees.

In general:

• Banks are best for borrowers with strong credit, stable income, and time to go through a standard approval process
• Private lenders are best for borrowers who need speed, flexibility, or a temporary mortgage solution

If your main goal is the lowest long-term borrowing cost, a bank is the better option. If your main goal is access to financing when a bank says no, a private lender may be the more practical short-term choice.

Comparing Bank vs. Private Mortgage Rates

Private Mortgage Lenders vs B Lenders

B lenders, such as Mortgage Finance Companies (MFCs), sit between banks and private lenders. They are more flexible than banks, but less flexible than private lenders. In general, B lenders still want stronger documentation, more stable income, and lower risk than a private lender may require.

B Lenders, which are usually larger financial companies, mainly deal with insured mortgages rather than uninsured mortgages. This means that the loan-to-value (LTV) ratio would be higher than 80%, as in a down payment of less than 20% was made. CMHC mortgage insurance has specific requirements, such as a minimum credit score, purchase price limit, and amortization period limits. Private mortgage insurance providers, namely Canada Guaranty and Sagen, are alternatives to CMHC mortgage insurance.

A B lender may be a better fit if:

• you can document your income
• your credit issues are limited
• you want a lower rate than a private lender
• you are not in a rush and can meet more standard underwriting conditions

For many borrowers, the ideal path is to use a private mortgage only temporarily, then refinance into a B lender or A lender once the file is stronger.

Private Lender Fees

Private mortgage fees can make a major difference in the true cost of borrowing. Two private mortgage offers may have similar interest rates but very different total costs once lender fees, broker fees, legal fees, appraisal costs, and other charges are included.

For example, one private lender might charge 8% and no fees, while another might charge 6%, which can turn into an effective annual rate of 9% after fees. Comparing lenders solely on the rate that they offer does not include all costs, which can drastically affect the total cost of borrowing for your mortgage.

Common private mortgage costs include:

• lender fee
• broker fee
• legal fees
• appraisal fee
• setup or administration fees

That's why borrowers should compare the all-in cost of a private mortgage, not just the headline rate. A lower advertised rate does not always mean the mortgage is cheaper overall if the fees are significantly higher.

Example Private Mortgage Fees

Types of Private Mortgage Lenders

Private mortgage lenders are not all the same. The main types include mortgage investment corporations (MICs), private lending companies, syndicated mortgage arrangements, and individual private lenders.

• A Mortgage Investment Corporation (MIC) is the largest type of private mortgage lender. MICs pool together funds from investors to fund a variety of different mortgages, helping to spread out risk. Investors of MICs receive interest income.
• A Syndicated Mortgage is one that is funded by multiple private individuals. Syndicated mortgages are usually led by licensed mortgage brokers.
• Individuals can be private lenders if they lend their own money to another individual on a one-to-one basis.

Some private lenders focus on first mortgages with lower LTVs. Others specialize in second mortgages, bad credit mortgages, bridge financing, debt consolidation, commercial properties, or niche property types. Since each lender has its own risk appetite, one lender may decline a file that another lender is willing to fund.

What affects approval with a private mortgage lender?

Private mortgage lenders usually focus on a few key factors when deciding whether to approve a mortgage and what pricing to offer.

The most important factors are:

• Loan-to-value (LTV): Lower LTV usually means lower risk and better pricing
• Mortgage position: First mortgages are usually cheaper than second mortgages
• Property type and location: Standard, marketable properties in urban markets are easier to finance
• Borrower profile: Credit still matters, even in private lending
• Exit strategy: A clear plan to refinance, sell, or repay improves lender confidence
• Term length: Private mortgages are usually short-term, of less than 2 years, often designed as a temporary solution

Even when a borrower has bruised credit, strong equity and a clear exit plan can materially improve the chances of approval.

Private Mortgage Frequently Asked Questions

How long does it take to get a private mortgage?

Approvals can happen within a day or two, while full funding may take a few days longer depending on the appraisal, legal work, and complexity of the file. This means that private mortgages can often be arranged faster than bank mortgages, especially when the property, title, and supporting documents are straightforward.

If speed matters, ask upfront whether the lender can handle urgent closings and what documents are needed to avoid delays.

Should I stay with a private mortgage lender?

Private mortgages are usually best used as a short-term solution, not a long-term strategy. Rates and fees are higher, so many borrowers use a private mortgage to solve a temporary problem and then move to a bank or B lender once their credit, income, or overall file improves.

Before taking a private mortgage, it's smart to ask what your realistic exit strategy is. That could mean refinancing, selling the property, reducing debt, or improving your credit and documentation before renewal.

What happens if my private lender goes bankrupt?

If a private lender goes bankrupt or exits the business, your mortgage does not disappear. In most cases, the mortgage is transferred or sold, and you would continue making payments under the terms of your mortgage agreement.

Are private mortgage lenders safe?

Private mortgage lenders can be a legitimate financing option, but borrowers should review the lender, the broker, the fees, and the full mortgage terms carefully. Ask for all costs in writing and make sure you understand the interest rate, lender fee, broker fee, legal costs, and what happens if you need more time at the end of the term.

Can I get a private mortgage with bad credit?

Yes, sometimes. Private lenders are often more flexible than banks when it comes to bruised or bad credit. However, bad credit does not mean pricing will be the same. Your rate and fees will usually depend on your equity, the property, the mortgage position, and your exit strategy.

Do private mortgage lenders require a broker?

Many private mortgage lenders work through mortgage brokers, and in practice a broker is often the easiest way to access multiple private lenders and compare offers. A broker can also help package the deal, explain the fees, and present your application to lenders that fit your situation.

List of Private Mortgage Lenders in Canada

Private Mortgage Statistics

Private Mortgage Interest Rates

Residential mortgage data from the Canada Mortgage and Housing Corporation (CMHC) shows that the average mortgage rate for the top 25 mortgage investment entities (MIEs) in Canada in 2023 to 2025 hovered around 9% to 10%. That's much higher than the best mortgage rates offered by banks and other lenders.

Average Lending Rates for Canada's Top 25 Mortgage Investment Entities (MIEs)

Growth of Private Mortgages Across Canada

While around half of MIC mortgages are located in Ontario, a sizable number is also found in British Columbia. Ontario and Alberta are seeing the most short-term growth, while Quebec and BC are seeing the largest declines.

Distribution of Private Mortgages in Canada

Source: CMHC Residential Mortgage Industry Report Fall 2025 Edition

Private Mortgage Delinquency Rates

As of Q4 2025, the private mortgage delinquency rate was at 2.01%, compared to 0.14% at credit unions.

Private mortgage delinquency rates at private lenders were at 1.73% in 2016 compared to only 0.24% at the banks, according to the CMHC. Delinquencies rose to 4.39% in 2019, with another 2.36% in foreclosures. Private mortgage delinquencies and foreclosures dropped slightly in 2021, falling to a delinquency rate of 2.53% and a foreclosure rate of 3.18% in Q1 2021.