Private Mortgage Lenders in Ontario

What Is a Private Mortgage?

A private mortgage is a loan secured by real estate, funded by an individual or a mortgage investment corporation (MIC) rather than a bank or credit union. Private lenders set their own criteria, move quickly, and focus on the property's equity and your exit plan more than on credit score or tax-return income. For Ontario borrowers who don't fit the prime box, private lending is often the bridge that gets a deal done.

Private mortgages are not a replacement for prime financing — they carry higher rates and shorter terms. They are a short-term solution for a specific problem: a credit blip you are repairing, a self-employed income that doesn't fit bank formulas, a consumer proposal you need to pay out, or a power of sale you need to stop. The goal is always to use the private mortgage to reach a better long-term option, not to stay in it.

Bad Credit and Bruised Credit Files

A low credit score, a recent bankruptcy, late payments, or a collection can shut you out of prime lending — but they don't shut you out of a mortgage entirely. Private lenders look at the whole picture: how much equity you have, whether the property is marketable, and whether you have a realistic plan to repair the credit and refinance into a prime or B lender at term end.

The structure matters. A private mortgage can pay off the collections dragging your score down, stop the cycle of high-interest payday or credit-card debt, and give you 12 to 24 months of clean payment history — which is often exactly what's needed to qualify for a B-lender or prime refinance at renewal. It is credit repair financed by your equity, with a clear endpoint.

Self-Employed Borrowers

Self-employed borrowers are routinely underserved by prime lenders, whose stress-test qualifying income is based on the lower of declared or net income — which, after legitimate write-offs, can look far smaller than what the business actually earns. Private lenders take a common-sense approach: they look at bank statements, the business's real cash flow, and the property's equity rather than a single tax line.

For business owners who need to close quickly on a purchase, refinance out of a high-rate first, or bridge to a B-lender once two years of clean self-employed income is documented, a private mortgage fills the gap. The exit is usually a refinance into an alternative lender once the income history and credit profile support it — often within one to two years.

• Common-sense income assessment via bank statements, not just tax-line income.
• Closes quickly — often within days, not weeks.
• Bridges self-employed borrowers to B-lender or prime financing once income is documented.
• Useful for purchases, refinances, and equity take-outs when prime qualifying fails.

Consumer Proposals and Bankruptcy

If you are in a consumer proposal or a recent bankruptcy, prime lenders will typically decline you until the proposal is paid out and some seasoning has passed. A private mortgage can pay out the consumer proposal in full — often the single fastest way to complete it — and give you a fresh start with a single secured payment. Once the proposal is discharged and you build clean payment history, refinancing into a B or prime lender becomes realistic.

The same logic applies after a bankruptcy discharge: a private mortgage bridges the gap between discharge and the two-year seasoning most prime lenders want to see. The key is that the private mortgage is paired with a plan — repair, refinance, exit — not treated as a permanent home. We help you build that plan before you sign.

Power of Sale Situations

In Ontario, lenders typically use power of sale (not foreclosure) when a mortgage is in default. If you have received a notice of power of sale or are behind on payments, time is short — but you still have options. A private mortgage can bring the first mortgage current, stop the power of sale, and buy you the months needed to sell the property on your terms or refinance into a workable long-term loan.

Acting early matters enormously. Once the power of sale process advances, legal costs mount and the lender can sell the property below market value. A private mortgage arranged quickly can preserve your equity and your credit. If selling is the right outcome, the private mortgage buys time to list and close a sale at fair value rather than under distress. We move fast on these files because speed is the whole point.

Short Terms, Fees, and Exit Strategy

Private mortgages typically run one-year (sometimes two-year) terms, often interest-only, with a rate set by the lender based on risk and equity. Expect lender fees, broker fees, appraisal, and legal costs at funding — these are rolled into the loan so you don't pay out of pocket, but they reduce the net cash you receive. Transparency on the full cost stack is non-negotiable; you should see every fee before you commit.

The exit strategy is the most important part of any private mortgage. Because the rate is higher and the term is short, you need a realistic plan to repay at maturity: refinance into a B or prime lender once credit or income supports it, sell the property, or improve the file over the term. Without an exit, a private mortgage becomes a recurring cost that erodes equity. We map the exit before the mortgage funds — that is the difference between a bridge and a trap.