A mortgage provided by an individual investor or private lending company rather than a bank or credit union.
Private mortgages serve borrowers who cannot qualify with traditional lenders due to credit issues, income documentation challenges, or property type. Typical private mortgage rates in Ontario range from 8% to 15% with additional fees of 2% to 4%. Most private mortgages have 1-year terms and are interest-only. They are intended as short-term bridge financing, not a long-term solution. All mortgage brokerages arranging private mortgages in Ontario must be licensed by FSRA.
Related terms: Mortgage Investment Corporation (MIC) | Loan-to-Value (LTV) Ratio | Financial Services Regulatory Authority (FSRA)