Private Mortgage vs B Lender

Private Mortgage vs B Lender - Which Is Right for Your Situation?

When a bank declines your mortgage, the next step is either a B lender or a private lender - or sometimes a path through both. The right choice depends on your credit, income, equity, and timeline. HB Mortgage Centre identifies the right fit for your specific file. FSRA #13449.

Apply Now Call (647) 542-6100

FSRA Brokerage #13449Â·Hardeep Batoo, Broker Licence #M13002408Â·Ontario-wideÂ·Both B lender and private options

The basics

What's the difference between a B lender and a private lender?

B lenders are regulated financial institutions - trust companies, alternative banks - with more flexible qualification criteria than major banks. They typically require some income documentation and moderate credit, but they have stated income programs and can work with credit challenges that banks won't. Examples include Equitable Bank, Home Trust, and CMLS Financial.

Private lenders are individuals, syndicates, or Mortgage Investment Corporations (MICs) that lend based primarily on property equity and loan-to-value. They're not regulated as institutions. They require less documentation than B lenders, can move faster, and will work with very damaged credit - but at higher rates and fees.

The key decision point: if you can qualify with a B lender, that's almost always the better choice. B lender rates are lower than private, the product is more conventional, and the relationship can lead to bank-rate refinancing sooner.

Who it's for

B lender vs private - which fits each situation

Match your situation to the right lender type before applying.

Credit score 500-650, some income documentation - B lender first

Consumer proposal discharged 12+ months, moderate income - B lender

Self-employed with gross business revenue documentation - B lender stated income

Very damaged credit, no documentable income, sufficient equity - private lender

Active consumer proposal or recent bankruptcy - private lender

Hard deadline (power of sale, closing date) - private lender moves faster

High LTV over 75-80% - both may decline; private more flexible at higher LTV with strong equity

Short-term bridge with clear exit - private lender for speed and term flexibility

Many files start with a B lender review. If B lenders decline, private becomes the next step. We often assess both simultaneously.

Rates & costs

Rate comparison: B lender vs private vs bank

The rate tier matters because it determines both your cost now and how quickly you can refinance to a lower tier.

Rates are indicative as of May 2026. Your specific rate depends on file factors. O.A.C. E.&O.E.

What it costs

Bank (A lender)Best rate - requires strong credit, full OSFI stress test qualification
B lenderHigher than bank - flexible income and credit, still institutional product
Private first mortgageHigher than B - equity-based, 6-8% indicative range (May 2026)
Private second mortgageHighest rate - 9-12% indicative range; reflects second-position risk
Exit timelineB lender: path to bank in 1-2 years. Private: path to B lender in 12-24 months

How it works

How we identify the right lender tier for your file

Credit and income review

We review your credit and income documentation first. If B lender qualification is possible, we explore that path before private.

B lender assessment

We identify B lenders whose programs fit your specific combination of credit score, income type, and equity situation.

Private lender assessment (if needed)

If B lenders won't work, we identify which private lenders are most appropriate based on LTV, property type, and the reason for the bank decline.

Present both options

Where both paths are viable, we present both with rates, fees, and total cost - so you can make an informed decision.

Exit plan

Regardless of which tier you start in, we build the plan to move down the ladder: private → B lender → conventional.

Start with the right tier

Applying to the wrong lender tier wastes your time and leaves hard inquiries

Applying to a B lender when your situation requires private - or applying to private when B lender is available - is a common mistake with real costs. Hard inquiries stay on your credit report. Timing matters for power of sale files. We identify the right tier before any application is submitted.

See: private mortgage Ontario →

Why a broker

One application - we know which tier before we submit

A broker reviews your file first and identifies which lender tier is realistic - before any application is submitted. This prevents wasted hard inquiries on lenders who won't approve you.

We also have relationships across both B lender and private lender tiers. Some files can go either way; we present both options simultaneously.

The right lender for your file is the one most likely to approve at the best available rate. We identify that match before you spend a credit inquiry finding out.

Our lender network →

FAQ

Frequently Asked Questions - Private vs B Lender Ontario

What is the difference between a B lender and a private lender in Canada?+

B lenders are regulated financial institutions with more flexible criteria than major banks. Private lenders are individuals or MICs that lend based primarily on property equity. B lenders are lower cost; private lenders are more flexible but more expensive.

When should I choose a B lender over a private lender?+

Choose a B lender when you have some income documentation and moderate credit. Private lenders are for situations where B lenders won't work: very damaged credit, no documentable income, hard deadlines, or equity-only qualification.

Are B lenders in Ontario regulated?+

Yes. Most B lenders are federally regulated financial institutions subject to OSFI oversight. Private lenders themselves are not regulated as institutions - brokers who arrange private mortgages are regulated by FSRA.

Find out which lender tier is right for your file

Call 647-542-6100 or apply online. We review your credit, income, and equity - and identify the right lender tier before any application is submitted.

Apply Call (647) 542-6100

Qualification subject to lender approval, credit and income assessment, property appraisal, and market conditions. O.A.C. E.&O.E.

FSRA Brokerage #13449 Â· Hardeep Batoo, Broker Licence #M13002408 Â· Ontario-wide

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