Private Mortgages in Toronto
Equity-based lending — with a clear exit plan.
Private mortgages are short-term loans funded by individual investors or Mortgage Investment Corporations (MICs), priced on the property's equity rather than the borrower's profile. They're a tool, not a destination — used when timing or qualification rules out a bank, with a planned exit back to A-lender financing.
Who this is best for
- Owners with credit, income, or status-of-stay issues
- Buyers needing to close fast or with non-standard income
- Owners bridging between two properties
- Borrowers consolidating arrears or tax debt to save the home
How a Toronto mortgage broker helps
- Compares offers across multiple MICs and private investors
- Confirms all-in cost: rate, lender fee, broker fee, legal
- Builds a 6–24 month exit plan back to A-lender financing
- Surfaces material risks in plain English before you sign
- Coordinates appraisal and legal independent of the lender
What lenders typically look at
- Equity-based — typically 75–80% LTV maximum in Toronto
- Recent appraisal required
- Property location, condition, and marketability heavily reviewed
- Borrower's exit plan is part of the underwriting
Documents you'll likely need
- Recent appraisal (or willingness to order one)
- Photo ID
- Current mortgage statement(s)
- Property tax confirmation
- Income documentation as available
A Toronto example
Bridging a closing gap
An owner selling in 9 months but closing on a new build in 2 months is reviewed for a short-term private second to cover the down payment, with a documented exit when the existing home sells.
Frequently asked questions
+How much do private mortgages cost?
Rates and lender/broker fees are higher than banks and vary widely by file. A broker discloses the full cost of borrowing in writing before you commit.
+How long is a private mortgage term?
Typically 6–24 months, structured around a documented exit back to traditional financing.
+Can I get a private mortgage with bad credit?
Often yes — private lenders price on the property's equity, not solely the borrower's credit. The exit plan matters most.
+What are the risks?
Higher cost, shorter term, and the possibility of needing to renew if your exit isn't ready. Independent legal advice is strongly recommended.
Related
Private mortgages can involve higher rates, fees, and risks than traditional mortgages. Borrowers should understand the full cost of borrowing, have a clear exit strategy, and consider independent legal and financial advice before signing.