Private Mortgages in Ontario: An Overview
Private mortgages are funded by individuals or companies rather than traditional financial institutions. They are often short-term solutions for borrowers who don't meet conventional lending criteria. This guide is general information only.
When a Private Mortgage Might Be Considered
- Poor credit history or recent bankruptcy.
- Self-employed with difficulty proving income.
- Need for fast financing to close a purchase or avoid foreclosure.
- Property types that banks won't finance.
Typical Terms and Costs
Private mortgages usually have:
- Higher interest rates than bank mortgages.
- Shorter terms (6 months to 2 years).
- Lender fees and possibly broker fees.
- Interest-only payment options in some cases.
Risks to Understand
Private lending is not regulated like traditional mortgages. Borrowers should have a clear exit strategy, such as improving credit to refinance with a bank later.
Review note: Add Ontario-specific private lending regulations and a disclaimer that private mortgages are high-risk and not suitable for everyone.
Questions borrowers ask
How fast can I get a private mortgage?
Private mortgages can sometimes be arranged in a few days, compared to weeks for a bank mortgage. However, speed depends on the lender and the complexity of your file.
Are private mortgage rates negotiable?
Rates and terms may be negotiable, but they are generally higher than conventional rates. A broker can help you compare offers and understand the total cost.
FairChoice will help you compare practical next steps without pressure or guaranteed-outcome claims.
Related FairChoice resources
Ontario city mortgage guides
Information is general and not financial, legal, or mortgage approval advice. Confirm all details with a licensed mortgage professional.