Private mortgage lenders offer short term loans typically a term of between six months and three years. The borrower is not required to pay back the principle. The result is lower repayments, as he simply pays back the interest.

Private Mortgages are Short Term Loans

As Canadian banking controls become stricter and the criteria for qualifying become more stringent, more and more people are finding it increasingly difficult to access a bond through the bank. Yet most would love to buy a home. This is why the private mortgage industry is growing so rapidly. In 2015 this industry was already responsible for between four to five percent of mortgages in Canada, and this number is believed to be growing.

Private mortgage lenders offer short term loans typically a term of between six months and three years. The borrower is not required to pay back the principle. The result is lower repayments, as he simply pays back the interest. Over the term of the loan the borrower should work on improving his credit rating and his home equity because the aim should be to qualify for a conventional loan at the end of the term.

Circumstances Demanding Private Mortgage Use

Private mortgages are generally used in the following circumstances:

  • When borrowers do not qualify for a conventional loan either because their credit scores are too low or because they are unable to prove their monthly income as can happen to the self-employed and commission earners
  • When borrowers are not Canadian residents
  • When borrowers wish to consolidate debt, and pay off higher interest credit
  • To cover taxes, or to prevent foreclosure
  • When borrowers wish to invest in property or renovate and flip a property using a second mortgage
  • When borrowers wish to buy an unconventional property that the banks won’t fund

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Featured Rates

FIXED

LenderRateTerm
Mortgage Lendwise RateLendwise

3.40%

5-Year
Mortgage First National Bank RateFirst National Financial

3.59%

4-Year
Mortgage RMG RateRMG Mortgages

3.29%

3-Year
Mortgage Street Capital RateStreet Capital Bank

3.19%

2-Year
Mortgage TD Bank RateTD Bank

3.19%

1-Year

VARIABLE

TermRate
5-Year Variable

2.75%

3-Year Variable

3.35%

OTHER

TypeRate
Line of CreditStarting at

3.00%

Equity LoansStarting at

5.99%

Private MortgagesStarting at

5.99%

The Process is Quicker and Easier

Private mortgages are both quicker and easier to obtain. Private mortgage lenders are more concerned with the value of the property and the size of the down payment than in the prior credit history of the borrower. They are interested in the condition of the property, its location and its market value since they use the property as collateral for the loan. They will base their decisions on the loan to value ratio. Institutional lenders on the other hand tend to very rigid and bound by bureaucracy.

Given the higher risk, private mortgages are considerably more expensive than conventional mortgages, with interest rates of ten to eighteen percent. Additional fees such as legal, lender, appraisal and broker fees must also be taken into consideration. These can amount to anything from one to four percent of the loan amount, and are sometimes included in the mortgage amount.

House-keys

A Broker Will Match You with the Best Lender

If you plan on using a private mortgage you must have a realistic plan for the longer term. A broker can help you to find the right lender. Mortgage brokers are a great help to both lender and borrower. They generally have a wide range of lenders on their books and they can help you to match your needs with the right private lender many of whom specialise. He will also help you to structure your loan and plan the exit strategy.

OUR CUSTOMERS LOVE US

My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Linderman Beadles
Linderman Beadles
06:16 26 Feb 18
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Gina Carroll
Gina Carroll
05:06 28 Feb 18
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Deane Laflamme
Deane Laflamme
04:40 27 Feb 18
My wife and I recently purchased our first place, so we started to look for a mortgage broker. Neither of us really knew what we were doing, so it was important to us that we could find someone who could guide us through the whole process. After some searching we finally stumbled upon the guys at certified mortgage broker We worked with leon and his team, got a great rate and they took their time to explain and guide us through the whole process. Great rates and great service. Would absolutely recommend.
Stephnie Boyles
Stephnie Boyles
13:59 15 Nov 17
Got tired of sow service and mediocre rates from my bank, so I started looking for a mortgage broker. Had some family friends recommended Leon and his team, so decided to check them out. Was very impressed with Leon, he guided me through step by step, recommended a mortgage and I ended up switching to him. My rate is better and he always answers call and emails right away.
Billye Peralta
Billye Peralta
13:38 19 Nov 17
Was looking for a new mortgage broker, my old one moved so had to find someone else to work with. Didn't really know how to go about it so just started googling. After some searching and talking, decided to go with the guys at certified mortgage broker. No one could match their rates, plus their customer service is honestly some of the best i’ve seen.
Moore Hoover
Moore Hoover
02:25 16 Nov 17
We worked with Leon and he provided a thorough and a professional process in re-financing our mortgage. Communication was consistent, he was easy to reach and documents were processed quickly. Most importantly, we got a great rate that has us savings hundreds of dollars per month on our home. These guys really know what they're doing.
Melissa Brown
Melissa Brown
00:12 18 Jul 17
As third time home buyers we couldn't be happier with the service we got from Certified mortgage broker. The team did a great job working on our loan. Everything was fast, easy and transparent. Probably the best mortgage experience i’ve ever had.
Riley Clements
Riley Clements
15:27 20 Jul 17

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