Private Mortgage Lenders Ontario — When the Bank Says No
Banks approve roughly 60% of mortgage applications. If you're in the other 40% — or if you need money fast — private lenders exist for exactly this reason. RateCore works with 50+ private lenders across Ontario, from individual investors to large mortgage investment corporations. We find the right fit for your situation, not just the first available.
What Makes a Private Lender Different?
Canada's mortgage market has three tiers. Most people only ever deal with the first one.
Private lenders care most about one thing: the property. If the numbers work — enough equity, a reasonable exit plan, and a solid property in a good location — most private lenders will fund it. Your credit score, employment gaps, or tax situation matter far less.
Who Uses Private Mortgage Lenders?
Private lending isn't a last resort — it's the right tool for specific situations. Here are the most common ones we see at RateCore:
Bruised or Recovering Credit
A bankruptcy, consumer proposal, or string of late payments can lock you out of bank financing for years. Private lenders look past your bureau and focus on your current situation and equity.
Self-Employed Without 2-Year History
Banks want two years of NOAs showing declared income. If you've been self-employed for under two years, or if you write off too much, a private lender bridges the gap until you qualify conventionally.
Bridge Financing
Your new home closes before the old one sells. Rather than lose the deal, a private bridge loan covers the gap — typically for 30–90 days until your existing home sale closes.
Power of Sale / Foreclosure
If you've received a power of sale notice, time is everything. Private lenders can move in 5–10 days to refinance you out and stop the clock — something banks can't match.
Property Doesn't Qualify
Rural properties, properties with multiple kitchens, mixed-use buildings, or homes in disrepair often fail bank underwriting. Private lenders take a common-sense view of the asset.
Debt Consolidation with High TDS
If your Total Debt Service ratio is too high for an A or B lender, consolidating into a private mortgage can drop your monthly payments enough to qualify for A financing at renewal.
How Private Mortgages Work in Ontario
Private mortgages follow the same legal framework as any other mortgage in Ontario — registered on title, enforced through the Mortgages Act — but the terms are negotiated directly between the lender and borrower (through your broker).
| Feature | Typical Private Mortgage |
|---|---|
| Term length | 6 months to 2 years (most common: 1 year) |
| Payment structure | Interest-only or principal + interest — negotiable |
| Max LTV (1st mortgage) | Up to 75–80% of appraised value |
| Max LTV (2nd mortgage) | Up to 80–85% combined LTV |
| Typical rate range | 7.99% – 14.99% (varies by risk profile) |
| Lender fee | 1–3% of mortgage amount (added to mortgage) |
| Appraisal required | Yes — always on the lender's approved appraiser list |
| Funding timeline | 5–15 business days (rush: 24–48h possible) |
| Prepayment privilege | Varies — negotiate at origination |
| Renewal/exit | Goal is to move to A or B lender within 1–2 years |
Always have an exit strategy
Private mortgages are expensive. Before taking one, know exactly how you'll exit: will you sell? Refinance to a B lender after one year? Complete your income history? Your broker should help you build this plan — not just get you the funding.
Our Private Lender Network
Not all private lenders are created equal. We've spent years building relationships with lenders who are fair, transparent, and reliable — the kind who fund what they say they'll fund and don't change terms at the last minute.
Mortgage Investment Corporations (MICs)
Institutional-grade private lenders with structured underwriting and competitive rates for lower-risk files.
Individual Investors
High-net-worth individuals lending directly. More flexible on unique properties and situations that even MICs won't touch.
Syndicated Mortgages
Groups of investors pooling capital for larger deals, second mortgages, or commercial-residential mixed properties.
We submit your file to multiple lenders simultaneously and let them compete. You see all your options — rates, fees, terms — before making a decision. No pressure, no hidden fees, no surprises.
How to Get a Private Mortgage Through RateCore
Tell us your situation (5 minutes)
Fill out our short form — no SIN, no hard credit pull. Tell us the property address, what you need, and why you're looking at private lending. The more context you give, the better we can match you.
We assess your file and identify lenders
A licensed RateCore broker reviews your file within 1 business hour and identifies which lenders in our network are the best fit. We look at LTV, property quality, exit strategy, and your timeline.
You receive multiple offers
We submit to 3–5 lenders simultaneously and present you with all the offers we receive — rates, fees, terms, prepayment privileges. No obligation to proceed with any of them.
Appraisal and document review
Once you choose a lender, they'll order an appraisal (typically 2–3 days). Your broker coordinates all documents with the lender and their lawyer.
Legal and funding
Both sides need a lawyer. If you don't have one, we can refer you. The lender sends funds to your lawyer's trust account, who disburses on the closing date. Total timeline: 5–15 business days.
Why You Should Never Go Directly to a Private Lender
The private lending market is unregulated on the lender side, which means there are bad actors. Going directly — through social media, Kijiji, or word of mouth — exposes you to:
- Rates quoted verbally that change at signing
- Undisclosed fees added after you've paid for an appraisal
- Loan-to-own lenders who deliberately set you up to default
- No competitive pressure — you only see one offer
- No broker fiduciary duty to act in your best interest
RateCore brokers are licensed by FSRA and legally required to act in your best interest. We shop multiple lenders, disclose all fees upfront, and only recommend deals that make financial sense for you — including telling you when a private mortgage is the wrong move and a different solution exists.
Frequently Asked Questions
What is a private mortgage lender?
A private mortgage lender is an individual investor, mortgage investment corporation (MIC), or syndicate that lends their own money rather than depositing money from savers. They're not regulated by OSFI, which means they set their own qualification rules. This makes them far more flexible than banks — but rates are higher to reflect the added risk they're taking on.
What interest rates do private lenders charge in Ontario?
Private mortgage rates in Ontario typically range from 7.99% to 14.99% depending on the loan-to-value ratio, property type, location, and the borrower's situation. Rates are higher than A or B lenders because private lenders take on deals that institutional lenders won't touch. A strong exit strategy (like an upcoming renewal or planned sale) usually helps negotiate a lower rate.
How quickly can a private mortgage close in Ontario?
Private mortgages can close in as little as 5–10 business days, and some lenders can fund within 24–48 hours for straightforward deals. This is dramatically faster than banks (30–45 days) and is one of the main reasons borrowers choose private lenders — especially for bridge financing or power of sale situations where time is critical.
Are there fees with private mortgages?
Yes — private mortgages typically include a lender fee of 1–3% of the mortgage amount, plus a broker fee. Legal fees also apply since each private mortgage requires a lawyer for both sides. These fees are often added to the mortgage so you don't need cash upfront. Always factor total cost of borrowing (rate + fees) when comparing options.
Is a private mortgage a good long-term solution?
Private mortgages are designed as short-term bridge solutions — typically 1 to 2 year terms. The goal is to use that time to improve your qualifying position: pay down debt, re-establish credit, build income documentation, or complete the transaction you needed financing for. From there, you move to an A or B lender at a much lower rate. Used with a clear exit plan, private lending is a powerful tool.
Will a private mortgage hurt my credit score?
Most private lenders do not report to the credit bureaus, so a private mortgage typically doesn't appear on your credit report. The application itself may involve a soft pull only. This can actually be beneficial — it gives you time to improve your credit without adding another account to your bureau. However, defaulting on a private mortgage can still result in legal action and power of sale proceedings.
Don't navigate private lending alone
Our FSRA-licensed brokers have placed hundreds of private mortgages across Ontario. We know which lenders are fair, which properties they'll fund, and how to get you out on the other side with your finances intact.
Talk to a Private Lending Specialist →Free consultation · No obligation · Same-day response