Equity-Based Private Lending
Private Mortgages in Ontario
If a bank has turned you down, or you need financing faster or more flexibly than a bank can move, a private mortgage may be a way forward. It uses the equity in your property as security for a shorter term, while you work toward a longer-term plan.
We are an FSRA-licensed Ontario mortgage brokerage, not a lender. We arrange private mortgages with a range of lenders and structure the file around your situation, subject to qualification and a property review.
Written by the HB Mortgage Centre team. Reviewed by Hardeep Batoo, Principal Broker (licence M13002408). HB Mortgage Centre is an FSRA-licensed brokerage (#13449). Last updated: June 23, 2026.
FSRA Brokerage #13449·Broker Licence #M13002408·Ontario-wide·All credit situations reviewed
TL;DR
The short version
A private mortgage in Ontario is a loan secured against your home by a private lender, rather than a bank. It is usually short term, focused on your equity rather than your credit score, and it costs more than a bank mortgage. It works best as a bridge: a way to solve a problem now while you set up a clear exit to better terms later. It is not the right tool for everyone, and we will tell you if it is not right for you.
The basics
What a private mortgage actually is
Put simply, a private mortgage is a loan secured by your property from a private lender, such as a mortgage investment corporation or an individual investor, instead of a bank or a major lender.
The key difference is what the lender looks at. Banks lead with your income and credit. Private lenders lead with your property and the equity in it. That is why a private mortgage can work when a bank says no, as long as there is enough equity and a sensible plan.
Private mortgages are usually arranged for a shorter term, often a year or two. They are meant to be temporary. Every private mortgage is subject to qualification, lender rules, property review, and documentation.
Fit and misfit
When a private mortgage makes sense, and when it does not
A good fit when
- A bank declined you, but you have meaningful equity in your home.
- Your income is hard to document, for example if you are self-employed or newly employed.
- You are working against a deadline and need to move quickly.
- The property itself is something a bank will not finance right now.
- You need a short bridge between two situations.
Usually the wrong choice when
- You do not have enough equity to make the numbers work.
- There is no realistic exit, meaning no clear path back to a bank or A-lender later.
- A conventional mortgage, a renewal, or a refinance would serve you better at a lower cost.
Here is the honest part. A private mortgage costs more than a bank mortgage. If a cheaper option fits your situation, we will point you to it instead. That is the advantage of working with a brokerage rather than a single lender.
Rates & costs
What a private mortgage costs
A private mortgage has two cost layers: the interest rate, and the fees. Fees can include a lender fee and a broker fee, plus legal and appraisal costs. Where borrower-paid lender or broker fees apply, we disclose them to you in writing before you commit.
We do not post rates or fee figures on this page, because they depend on your equity, the property, the lender, and current market conditions, and they change. For current pricing, see our private mortgage rates page, or ask us directly. You can also estimate payments and total borrowing cost with our private mortgage payment calculator, which gives an estimate only, not an offer.
The point is simple. A private mortgage should be priced so that the short-term cost is worth the problem it solves and the plan it sets up.
What it costs
- Interest rateGenerally higher than conventional rates
- Lender feeA percentage of the loan, charged by the lender
- Broker feeWhere applicable - disclosed in writing first
- Legal feesYour legal costs and the lender's
- AppraisalA current property appraisal is typically required
Rates, fees, terms, and APR are subject to lender approval, borrower qualification, property review, title review, loan-to-value, property type, location, documentation, market conditions, and applicable laws. O.A.C. E.&O.E.
The exit strategy
The exit strategy matters as much as the mortgage
A private mortgage is meant to be a bridge, not a destination. The exit strategy is the plan for what happens at the end of the term: moving back to a bank or A-lender, refinancing, or selling.
A workable exit usually depends on several things coming together: rebuilding credit, stabilizing or proving income, the property holding or growing in value, meeting lender rules, and getting the documentation in order. None of that is guaranteed, because it depends on your circumstances and the market. What we can do is build the file around a realistic exit from the start, so the private mortgage is doing a job with an end in sight.
The rule of thumb: if we cannot see a sensible exit, a private mortgage probably is not the right answer, and we will say so.
Comparing options
Private mortgage or B-lender: how to think about it
People often ask whether they need a private mortgage or whether a B-lender would do. They are different tools.
Mainly looks at
B-lender
Income and credit, with more flexibility than a bank
Private
Property and equity
Typical use
B-lender
You almost qualify at a bank but need more flexibility
Private
A bank and a B-lender both say no, but you have equity
Relative cost
B-lender
Higher than a bank, lower than private
Private
Highest of the three, short term
Typical term
B-lender
Standard terms
Private
Shorter, bridge-style
In plain English, a B-lender is a step down from a bank, and a private mortgage is the option when the bank and the B-lender are both out of reach for now. We will tell you which one your situation actually calls for.
How we help
How we arrange a private mortgage
We start with a short, no-pressure conversation about your situation and your goal. From there we review your equity, the property, and the documentation, then we approach lenders who fit the file. You see the cost and the conditions laid out clearly, including fees, before you decide anything. Everything is subject to qualification, lender review, and a property assessment.
We are a brokerage, so we work for you, not for a single lender.
FAQ
Common questions about private mortgages
What is a private mortgage in Ontario and how does it work?+
When does a private mortgage make sense, and when should I avoid one?+
What do private mortgages cost?+
How long is a private mortgage, and what is the exit strategy?+
Can I get a private mortgage with bad credit or non-traditional income?+
Talk through your situation with a broker
If a bank has said no and you are not sure what is next, a short conversation is the fastest way to find out where you stand. We will give you the honest version, including whether a private mortgage is the right tool or whether something cheaper fits.
Private mortgages are higher-cost, short-term financing. Not every file qualifies. For private mortgages and complex files a borrower-paid broker fee may apply - all fees disclosed in writing before you sign. Rates, fees, terms, and APR subject to lender approval, borrower qualification, property and title review, documentation, market conditions, and applicable laws. O.A.C. E.&O.E.
FSRA Brokerage #13449 · Broker Licence #M13002408 · Ontario-wide · All credit situations reviewed
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