Private & B-Lender Mortgages in Ontario
Been turned down by the banks? Bruised credit or complex income doesn't mean the end of the road.
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When a traditional A-lender says no — because of credit history, non-traditional income, or a tight timeline — private and B-lenders offer a path forward. These are short-term, equity-based solutions to bridge you back to prime lending. I'll be straight with you about the costs and, most importantly, the exit plan to get you back to an A-lender.
WHY IT WORKS
What you get
HOW IT WORKS
Simple, from first call to close
When private lending is the right tool
Private lending solves timing and situation problems, not affordability problems. It fits when there is a specific event that ends it: a bruised credit file being rebuilt, a self-employed borrower whose two years of filed income are nearly complete, tax arrears that must be cleared before an A lender will look at you, a property that needs work before it qualifies, or a bridge between a purchase and a sale.
Every one of those has an exit. If a file has no exit — if private is simply the only way to afford the house — then private lending is not the answer, and I will say so.
What it genuinely costs
No soft language here. Private mortgages carry rates well above bank pricing, plus a lender fee and a broker fee, each typically a percentage of the loan and normally deducted from the advance. Terms usually run six to twenty-four months, frequently interest-only.
You will see the full cost written down — rate, both fees, legal, and the total dollars over the term — before you decide anything. Anyone arranging private financing who is vague about fees is telling you something important about themselves.
How much you can borrow
Private lending is secured by the property first and the borrower second. Expect roughly 75% to 80% of appraised value in the GTA for a first mortgage, and lower — often 75% combined — for a second. Rural, unusual, or hard-to-sell properties get more conservative treatment because the lender is pricing how quickly it could be sold.
Location matters more here than anywhere else in lending. A property in Toronto or the inner GTA supports higher ratios than the same house two hours north.
The exit plan is the whole point
A private mortgage should be written with its ending already designed. Twelve months of clean payments, a resolved CRA balance, filed income, a completed renovation, a sale — something specific that returns you to B-lender or A-lender pricing at the end of the term.
What goes wrong is renewal after renewal at private rates, with fees each time. That is how equity disappears. If we do this, we set the exit at the start and I check in before the term ends. See also self-employed lending and refinancing, which solve many situations people assume require private money.
FAQ
Common questions
Are private mortgage rates higher?
Yes — private and B-lender rates are higher than prime because they take on more risk and are usually short-term. The goal is always a temporary bridge with a plan to move you back to an A-lender.
How much down payment or equity do I need?
Private lending is equity-based, so you'll generally need more equity — often 20–35% depending on the property and situation. I'll tell you exactly where you stand.
How long do these mortgages last?
Typically one to two years. They're designed as a bridge while you repair credit or stabilize income, after which we refinance you into prime lending.
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