Unlock Alternative Financing Options: A Guide to Private Mortgages

A private mortgage is a short-term loan secured against real estate, funded by private investors rather than banks. Approval is primarily equity-based — your property's value matters more than your credit score or income documentation.

Borrowers who have been declined by banks, have bruised credit, are self-employed with unconventional income documentation, need a bridge loan, or require fast funding (often 48–72 hours) can qualify. A minimum equity stake or down payment is typically required.

Private mortgage rates in Ontario typically range from 8% to 14%+ per year depending on the property location, loan-to-value ratio, borrower risk profile, and mortgage position (first vs second). Lender fees are typically 1–3% of the loan amount. Contact lendsimpl for current quotes.

Private mortgages can often close within 5–10 business days in Toronto, and sometimes faster. This speed makes them popular for property purchases with tight deadlines, bridge financing, or when traditional lender timelines can not be met.

A first private mortgage takes priority position on the title, meaning it gets repaid first in a sale or default. A second mortgage sits behind the first mortgage. Second mortgages carry higher rates because the lender takes more risk if the property value drops.

Yes. Private lenders focus primarily on the property's value and your available equity rather than your credit score. Even borrowers with scores below 500, consumer proposals, or recent bankruptcies can qualify with sufficient equity — typically 15–25% or more.

Most property types qualify: single-family homes, condos, townhouses, multi-unit residential, rural properties, vacant land, and some commercial properties. Each lender has specific property criteria. lendsimpl matches you with the right lender for your property type.

Private first mortgages typically fund up to 75% of the property's appraised value (LTV). Second mortgages can reach up to 80% combined LTV. Some lenders in urban Toronto offer higher LTVs for strong properties. Loan amounts range from $50,000 to $5,000,000+.

Typical fees include: lender fee (1–3% of loan amount), legal fees ($1,500–$3,000), appraisal fee ($400–$600), and broker fee (if applicable — lendsimpl's broker fee is $0 on most private mortgage placements). All fees are disclosed upfront in the term sheet.

A private mortgage is a strategic short-term tool — not a long-term solution. It is ideal when you need to act fast, have been declined by banks, or need bridge financing. The goal is always to transition to a lower-rate institutional mortgage once your credit, income, or property situation improves.

Absolutely. Self-employed borrowers are among the largest private mortgage user groups. Private lenders accept bank statements, asset declarations, and business revenue documentation instead of traditional T4 income. If your property has sufficient equity, funding is straightforward.

A bridge loan is a short-term private mortgage (typically 1–6 months) that bridges the gap between purchasing your new home and selling your current one. The loan is secured against one or both properties and is repaid when your current property sells.

Yes, private mortgages are commonly used for investment properties including rental acquisitions, fix-and-flip projects, and commercial ventures. Private lenders evaluate the property's value and income potential, not just your personal qualification profile.

This is called your exit strategy and should be planned before taking a private mortgage. Typical strategies include: improving credit score over 6–12 months, accumulating income documentation, increasing property value through renovations, or waiting for a pending sale to close.

Our private mortgage brokering services are compensated by the lender on most placements — not by you. No application fee, no obligation. You receive professional advice, lender comparisons across 50+ private lenders, and full cost-benefit analysis at zero cost.

Private mortgage terms are typically 6 to 24 months, with 12 months being most common. Some lenders offer up to 36-month terms. The short-term nature means the focus is on an exit strategy to move you to a lower-rate mortgage once your situation improves.