What Is a MIC (Mortgage Investment Corporation) and How Does It Lend?

You've been told your file might go to a MIC. Maybe a mortgage agent mentioned it, maybe you saw the acronym on a term sheet. And your first thought was probably: is that a real thing, or is that the polite word for a loan shark?

It's a real thing. A regulated one, actually, and one of the most ordinary structures in Canadian mortgage lending. Once you see how it's built, the mystery falls away.

Let's walk through what a Mortgage Investment Corporation is, how it decides whether to lend on your home, what it typically costs, and how it differs from the other things people lump together under "private mortgage lenders."

So what actually is a MIC?

MIC stands for Mortgage Investment Corporation. Put simply, it's a company that pools money from a group of investors and lends that money out as mortgages.

Think of it as a small, private mortgage fund. Dozens of investors, sometimes hundreds, put money in. A manager runs the fund, sources mortgage deals, underwrites them, and lends the pooled money to borrowers like you. The interest you pay flows back to those investors as their return.

MICs aren't a grey-market invention. They're defined in the federal Income Tax Act, and the rules are specific: a MIC needs a minimum number of shareholders, no single investor can control it, and most of its assets have to sit in mortgages or cash. Many Canadians hold MIC shares inside their RRSP without ever thinking about the borrowers on the other side. So when your file goes to one, you're borrowing from a regulated investment vehicle, not from an anonymous "they."

How a MIC decides to lend

This is where a MIC feels different from your bank. A bank leads with your income and your credit score. A MIC leads with your property. Its most important question is how much equity is in the home, and how easily the mortgage could be recovered if things went sideways. That's why MIC lending is often called equity-first or asset-based lending.

In practice, that means:

• Equity is king. The MIC looks hard at your LTV (loan-to-value, or how much you're borrowing against the home's appraised value). On a first mortgage, a MIC will typically lend to roughly 75% of value; on a second, combined lending often stretches to around 80–85%. That's a typical band, not a promise.
• Underwriting is manual. There's no algorithm auto-declining you because a payment was late in 2023. A person reads the file, weighs the property and the exit plan against the story behind a bruised credit score, and makes a judgment call.
• The stress test doesn't bind them the same way. Banks must qualify you at the higher of your contract rate plus 2% or 5.25%. MICs and other private lenders aren't held to OSFI's minimum qualifying rate the way federally regulated lenders are, which is part of why they can approve borrowers a bank just declined.

The property carries the file; your income and credit are context rather than the whole story. And because the decision hinges on equity, a MIC can often move in days rather than weeks.

MIC vs. individual private lender vs. syndicated mortgage

People use "private lender" as a catch-all, but there are three genuinely different things underneath it. The difference matters because it changes who you're actually borrowing from.

The takeaway: a MIC gives you the consistency of a small institution, while an individual private lender is one relationship that lives or dies on that one person. Neither is automatically better, but you should know which one is funding your file.

What a MIC typically costs

MIC money is not cheap money, and no honest agent will pretend otherwise. You're paying for speed, flexibility, and a lender that says yes when others say no. Here's the shape of it, always a range and always with fees on the table.

• Interest rate: a MIC first mortgage often lands roughly in the 8–12% range; a second mortgage roughly 10–15%, depending heavily on your LTV and the property.
• Lender fee: commonly around 1–4% of the loan, paid up front and often netted out of the advance.
• Brokerage fee: often around 1–2% on a private deal, disclosed to you in writing before you sign.
• Legal and appraisal: usually a few thousand dollars in total.
• Term: typically one year (sometimes up to two), and frequently interest-only, so your payment covers the interest and the principal stays put.

Worth knowing: since January 1, 2025, the federal criminal interest rate is 35% APR, all-in, counting interest and most fees together. On small second mortgages, stacked flat fees can push the effective APR up quickly, so a good agent watches that math for you.

A worked example, and the exit that comes with it

Say your home is worth $800,000 and you owe $480,000 on your first mortgage — that's 60% LTV. You need $80,000 to clear high-interest debt and a tax bill, but your income dipped last year and the bank passed. A MIC might fund an $80,000 second mortgage, bringing combined lending to $560,000, or 70% of the home's value — comfortably inside a MIC's comfort zone. At 12% interest-only, that $80,000 costs roughly $800 a month in interest, plus your up-front fees.

Not cheap. But it's a one-year bridge, not a forever mortgage, and that framing is the whole point: a MIC mortgage is a tool with an exit built in. The lender expects you to leave. The plan might be to repair your credit and move to a B lender, sell a property, finish a renovation and refinance, or clear the debt that scared the bank off. Going in without a clear exit is the most common way a short-term private mortgage turns into an expensive long-term one.

Is a MIC right for you?

A MIC can be a sensible option when a few of these are true:

• You have real equity in your home — that's the engine of the whole thing.
• Your income or credit is temporarily complicated: self-employed, recently through a credit event, between jobs.
• You need speed a bank can't match.
• You have a clear, realistic exit within a year or two.

It's probably the wrong fit if you don't have much equity, if the higher cost would strain you every month with no plan to get out, or if a B lender would take you at a fraction of the price. That last one is worth checking first — sometimes people reach for private money when a regulated alternative lender would have said yes.

One consumer-protection note: in Ontario, a private mortgage, MIC deals included, can only be arranged by a Level 2 licensed mortgage agent or a mortgage broker. If someone offering you private money isn't licensed, that's your cue to stop.

A MIC isn't a last resort and it isn't a trap. It's a specific tool for a specific job: bridging a gap, backed by your home's equity, with a plan to move on. The trick is knowing that going in, and pricing it against everything else on the table.

Frequently asked questions

Is a MIC a legitimate, legal way to borrow?

Yes. A Mortgage Investment Corporation is defined under the federal Income Tax Act and is a well-established investment structure in Canada. In Ontario, the mortgage itself must be arranged by a licensed mortgage professional. It's a regulated part of the market, not a fringe one.

How is a MIC different from an individual private lender?

A MIC pools money from many investors and lends it under consistent, professionally managed criteria. An individual private lender is one person lending their own money, whose terms depend entirely on their appetite. A MIC feels more like a small institution; an individual lender is a single relationship.

What credit score do I need for a MIC mortgage?

There's no fixed cutoff, because MICs lead with your home's equity rather than your score. As a rough guide, borrowers below about 600, or those right after a credit event, often can't get bank or B-lender approval but can still be funded on an equity basis.

How long does a MIC mortgage last?

Typically one year, sometimes up to two, and often interest-only. It's designed as a short-term bridge with a planned exit, not a long-term solution.

Are MIC rates negotiable?

Rates and fees move mostly with your LTV and the property, so your strongest lever is a lower loan-to-value and a clean, well-documented file. A licensed mortgage agent can take your deal to more than one MIC and compare the all-in cost, which is usually where the real savings are.