Example: redeeming an Ontario tax-arrears certificate with a private second mortgage

The certificate clouded the title, so A-lenders were off the table — and the redemption window was finite, with the amount owing rising each month as penalty and interest accrued.

The borrower had a low-rate first mortgage they didn't want to break, and limited cash — a common bind at the certificate stage.

Because the first-mortgage rate was worth keeping, we arranged a private second mortgage behind it, sized to cover the full cancellation amount (arrears plus penalty, interest and costs) plus fees, leaving a healthy equity cushion at a conservative combined loan-to-value.

At funding, the money flowed from the lawyer's trust directly to the municipality; the account was paid in full, the tax-arrears certificate was cancelled, and it came off title.

We set the exit: stay current on taxes, season the file, and refinance off the private second toward lower-cost financing.

The certificate was cancelled within the redemption window and the tax sale stopped, while the low-rate first mortgage stayed untouched. The private second is a temporary premium — far cheaper than the equity that would have been lost in a municipal tax sale.