What are the main pros and cons of a private mortgage?
The pros: approval based on home equity rather than credit or income, fast and flexible closing, and a short-term structure that bridges a specific gap. The cons: a higher interest rate than a bank, lender and broker fees, usually a one-year term, often interest-only payments, and a loan-to-value cap around 75–80%. The single most important factor is having a realistic exit strategy back to a mainstream lender. Weighed against being declined entirely, or against 20%+ credit-card interest, a short private bridge can be the right move — but only with that exit in view.
Is a private mortgage a good idea?
It can be, when it’s used for what it’s good at: a short-term bridge to solve an urgent, specific problem while you set up a return to A-lending. It’s a poor idea as a permanent solution or when there’s no clear way out of it. The honest answer depends entirely on your situation and your exit plan — which is exactly what a licensed broker should map with you before you sign, not after.
Why are private mortgage rates and fees higher?
Private lenders are usually individuals or mortgage investment corporations lending their own capital, and they’re taking on files banks won’t — weaker credit, unprovable income, unusual properties, or urgent timelines. The higher rate and the lender fee price that added risk and speed. Rates are typically higher than bank and B-lender pricing, and there are usually lender and broker fees on top. We disclose every dollar in writing so you can compare the true cost, not a headline rate.
How long is a private mortgage term?
Most private mortgages are short — commonly one-year terms, sometimes interest-only. That’s by design: a private mortgage is meant to be a bridge, not a 25-year commitment. The short term keeps you focused on the exit and stops the higher cost from compounding over decades. If your plan needs longer, we’ll say so and look at whether a B-lender fits better.
How much can I borrow with a private mortgage?
Private lenders generally lend up to around 75–80% of your home’s value, counting your existing mortgage, though many stay more conservative depending on the property and location. Because approval rests on equity, the amount of equity you hold matters more than your income or score. On a firm 80% file you’d want a comfortable equity cushion; we confirm the numbers against a realistic property value before quoting anything.
Who is a private mortgage right for?
Typically borrowers a bank has declined for reasons that are temporary or explainable: self-employed with hard-to-prove income, bruised or recovering credit, a recent bankruptcy or consumer proposal, tax arrears, or a firm closing that a bank can’t fund in time. The common thread is meaningful home equity plus a credible path back to mainstream lending. If neither of those is present, a private mortgage is usually the wrong tool.
What is the exit strategy, and why does it matter so much?
The exit strategy is your concrete plan to leave the private mortgage — usually a refinance to an A- or B-lender once your credit, income, or property situation qualifies. It matters because the private mortgage is a short-term bridge; without a way off it, the higher cost keeps running. Before we place any private file, we map the exit: what needs to change, roughly how long it takes, and who you’ll likely refinance with. If we can’t see a realistic exit, we’ll tell you straight.
Can I get a private mortgage with bad credit or after bankruptcy?
Often yes — private lenders weigh equity far more heavily than credit history, so a low score, recent missed payments, a past bankruptcy, or a consumer proposal don’t automatically disqualify you the way they might at a bank. The trade-off is the higher rate and fees. Used as a bridge while you rebuild, it can be a sensible step; our bad-credit and post-bankruptcy pages go deeper on the path back to A-lending.
How fast can a private mortgage close?
Private files can often fund in a matter of days when speed is the point — a firm closing date, arrears about to escalate, or a bank that ran out of time. The exact timeline depends on the property, the paperwork, and the lender, so we won’t promise a date we can’t hit. If the clock is the whole reason you’re here, tell us up front and we’ll prioritize accordingly.
