Products

Vendor take-back

VTB

When the seller acts as the lender, financing some or all of the purchase price in exchange for a registered mortgage. Common in commercial deals and in residential when bank financing is partial.

In a vendor take-back (VTB), the seller lets you owe them part of the price, secured by a mortgage registered on the property. It can bridge a financing gap, help a buyer who's just short, or let a seller spread out a capital gain and earn interest.

VTBs are most common in commercial and investment deals, but appear in residential too — often as a second mortgage behind a bank first. Terms are negotiated directly between buyer and seller, so rate and length vary widely.

The buyer's primary lender must agree to the arrangement (especially if the VTB is a second charge), so loop in your broker and lawyer early to structure it so it doesn't jeopardize the main approval.

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Private mortgages

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A lender

A bank or monoline that prices its lowest rates and tightest underwriting against borrowers who fit prime credit, income, and property criteria. The big banks (RBC, TD, Scotia, BMO, CIBC, NB) and major monolines (MCAP, First National, MERIX) are A lenders.

B lender

An alternative ("alt-A") lender that prices higher than A lenders but flexes on credit history, income documentation, property condition, or self-employed earnings. Examples include the alternative-lending programs of Equitable Bank and Home Trust.

Bridge financing

Short-term loan that lets you close on a new home before the sale of your existing one funds. Priced at prime + premium, secured against both properties, typically up to 90-120 days.

Closed mortgage

A mortgage that limits how much extra you can prepay each year and charges a penalty if you break the term early. Almost all standard Canadian mortgages are closed because the rates are materially lower than open.

Collateral charge mortgage

A mortgage registered against your property for more than the actual loan amount, letting you increase the limit later without re-registering. Common at TD and Scotia. Makes inter-lender switches harder mid-term.

Conventional mortgage

A mortgage with at least 20% down. No mortgage default insurance required. Pricing is typically higher than insured because the lender carries more of the credit risk.

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