A private mortgage is a loan on your home from a private lender, not a bank. Private lenders lend on your equity, not your income or credit score. Most private mortgages last 6 to 12 months and are interest-only. In November 2026 they cost 7.49% to 10.99% on a first mortgage, plus 2-4% in fees. You get one through a licensed mortgage broker, because most private lenders will not deal with you directly.

How a private mortgage works

A private lender looks at three things: how much your home is worth, how much you owe, and how you will pay the loan back. If the numbers work, they lend. Your income and credit matter far less than at a bank.

Equity decides the loan. Most lenders go up to 75% of your home's value on a first mortgage, and 80% for a first and second together.
The term is short. Usually 12 months. The idea is to fix a problem, then move back to a bank.
Payments are interest-only. Your balance does not go down. That keeps the payment low.
There are fees. A lender fee (1-3%), a broker fee (1-2%), legal costs and an appraisal. You see them in writing before you sign.

Who private mortgages are for

A private mortgage is for people with equity and a deadline. Common reasons:

Your bank will not renew your mortgage. See self-employed mortgages.
You need to close a purchase before your sale closes. See bridge loans.
You have bad credit, a consumer proposal or a bankruptcy. See bad credit private mortgages.
CRA has a lien on your home. See CRA tax debt.
You got a notice of sale or a foreclosure petition. See stop foreclosure.
You need cash from your equity and the bank said no. See second mortgages.

Private lender vs bank: which is better?

A bank is better whenever you qualify. It costs less and lasts longer. A private lender is better only when a bank or B-lender cannot help you in time.

	Bank	B-lender	Private lender
Rate	4.5-5.5%	6-8.5%	7.5-11%
Fees	None	About 1%	2-4% in total
Looks at	Income, credit, stress test	Bank statements, bruised credit OK	Equity and your exit plan
Time to fund	2-6 weeks	2-3 weeks	5-12 days
Term	1-5 years	1-3 years	6-12 months

How to get a private mortgage in 5 steps

Talk to a licensed broker. Most private lenders only take files from brokers. Check the broker's licence with BCFSA (BC), RECA (Alberta) or FSRA (Ontario). In Ontario, only Level 2 agents and brokers can arrange private mortgages.
Share three things. Your home's value, what you owe, and your deadline. No credit check is needed to get a first answer.
Get a written commitment. It shows the rate, term, every fee and the lender's name. This takes 1-2 business days.
Appraisal and lawyers. An appraiser values the home ($400-800). Your own lawyer reviews the deal. By law you get a cost disclosure with the APR at least two business days before you sign.
Funding. The money goes lawyer to lawyer, usually 5-12 days after you start. Debts, arrears or CRA get paid right on the closing statement.

How to find a private lender

You can search for lenders, but most of them will send you to a broker. MICs and private lenders such as Three Point Capital, VWR Capital, CMI, Westboro and BFT say on their sites that they work only through licensed brokers. A broker compares several lenders for you and must show you all fees in writing. See the lenders in BC, Alberta and Ontario.

What a private mortgage costs

On a $500,000 first mortgage at 8.49% for 12 months, interest is $42,450. Fees and legal add about $12,600. The total is $55,050, which is an APR of 11.01%. Seconds cost more. See all rates and the true-cost calculator.

The risks, plainly

It is expensive. Use it for a short time, for a clear reason.
Renewal is not automatic. If you cannot pay it off at 12 months, the lender may charge a new fee or refuse to renew.
Missed payments move fast. In Ontario a lender can start power of sale after 15 days in default.
Scams exist. Never pay a fee before your mortgage funds. Never sign without your own lawyer.

That is why every file we do has a written exit plan back to a bank or B-lender.

Private mortgage questions

Is it easy to get a private mortgage?

Yes, if you have equity. Most lenders want at least 25% equity for a first mortgage. If you have that and a clear way to pay it back, you can get a commitment in 1-2 days.

Do private lenders check credit?

They check it, but a low score rarely stops a deal. What matters is your equity and your plan to pay it back.

Are private lenders legal and regulated?

Yes. In BC, lenders and brokers are licensed by BCFSA. In Ontario and Alberta the broker is licensed (FSRA, RECA), and the lender must be named on your documents. Always check the broker's licence.

Can I pay a private mortgage off early?

Usually yes. Many are open after three months, so you can pay them off with no penalty once a cheaper lender approves you.

What is a mortgage investment corporation (MIC)?

A MIC pools money from many investors and lends it out as mortgages. MICs are the biggest source of private mortgages in Canada and publish their lending rules.

Sources. FSRA, private mortgage consumer guidance and 2024 private lending report · CMHC Residential Mortgage Industry Report, Fall 2026 · Mortgage Directory private rates, October 2026 · lender websites, checked 5 November 2026.

Real people, not a call centre

Talk it through with a licensed broker before you decide

Tell us what is going on in a few lines. We call you back the same day with what lenders will say, what it costs in dollars, and how you get back to a bank. If private is the wrong tool, we say so.