When banks say no, private lenders say yes. Learn how private mortgages work, when you need one, and how to find the best private mortgage rates in Canada.
A private mortgage is a loan secured by real estate that's provided by an individual investor, investment pool, or private lending company rather than a traditional financial institution like a bank or credit union. Private lenders are often called "alternative lenders" because they operate outside the conventional banking system.
Private mortgages are typically used when borrowers can't qualify for bank financing due to credit issues, income documentation challenges, or unique property situations. They offer faster approvals and more flexible criteria, but usually come with higher interest rates.
Private mortgages aren't just for those with credit problems. Many successful investors use private financing to secure deals quickly, then refinance to a bank later at better rates.
Private mortgage rates are typically higher than bank rates because private lenders take on more risk. Here's what you can expect:
| Feature | Private Mortgage | Bank Mortgage |
|---|---|---|
| Interest Rate | 8.99% - 18%+ | 4.99% - 7.25% |
| Approval Speed | 3-10 days | 30-60 days |
| Credit Requirements | Flexible - poor credit OK | 650+ typically required |
| Documentation | Minimal | Full income verification |
| Loan Purpose | Short-term (1-3 years) | Long-term (5-25+ years) |
Not all private lenders are created equal. Here's how to find trustworthy private mortgage options:
Brokers have relationships with verified private lenders and can negotiate better terms on your behalf.
Ensure the lender is registered and follows provincial lending regulations.
Understand fees, prepayment privileges, and renewal conditions before signing.
Our network of trusted private lenders can help you get financing when banks won't. Get matched with a lender that fits your situation.
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