“Do I actually have enough equity for a private mortgage?”
With banks tightening rules and HELOCs disappearing, equity-based lending has become the most reliable path forward for many Canadians. But how much equity is really required?
Let’s break it down clearly — without bank jargon or guesswork.
First, What Does “Equity” Mean?
Home equity is the difference between:
Your property’s current market value, and
The total mortgages or liens registered against it
Example:
If your home is worth $1,200,000 and your mortgage balance is $700,000, your equity is $500,000.
Private lenders focus on loan-to-value (LTV) — not income, not credit scores.
The Real Answer: How Much Equity Do You Need?
For most private mortgages in Ontario, the typical equity requirements are:
✅ 65%–75% Maximum LTV
This means:
You generally need 25%–35% equity in your property
The more equity you have, the better the terms
Some scenarios allow flexibility, depending on:
Property type
Location
Exit strategy
Urgency of the request
Why Equity Matters More Than Income
Private lenders underwrite differently than banks.
They prioritize:
Property value
Marketability
Conservative leverage
A clear exit plan (refinance, sale, payout)
This is why private mortgages work well for:
Self-employed borrowers
Credit-challenged homeowners
Short-term or bridge scenarios
Time-sensitive refinances
Equity Requirements by Loan Type
🏡 Private First Mortgages
Typical max LTV: 70%–75%
Common for jumbo equity loans and unique properties
🧱 Second Mortgages
Combined LTV usually capped around 65%–70%
Ideal when HELOCs are frozen or banks won’t refinance
🔁 Refinance & Debt Consolidation
Often structured to keep total debt within safe equity limits
Used to replace high-interest consumer debt
🌉 Bridge & Short-Term Loans
Equity requirements depend heavily on exit timing
Strong exits = more flexibility
What Reduces Required Equity?
You may qualify with less equity if:
The property is in a strong market
The exit strategy is clear and short-term
The loan solves a specific problem (arrears, buyout, estate)
The request is conservative relative to value
What Increases Required Equity?
You’ll typically need more equity if:
The property is rural or specialized
There are title issues or multiple liens
The exit strategy is uncertain
The loan term is longer
The Fastest Way to Know: Use EquityCheck
Instead of guessing, Lendworth built EquityCheck — a quick, private way to estimate whether your equity works before applying.
👉 Check your equity here:
🔗 www.lendworth.ca/equity-check
It helps you understand:
Estimated property value
Current leverage
Whether a private mortgage may be viable
What type of solution may fit
No obligation. No credit pull. Just clarity.
Why Acting Early Matters
The biggest mistake homeowners make is waiting until:
Credit cards are maxed
Arrears have started
Banks have already declined
Early equity planning means:
Better options
Lower risk
More control
Bottom Line: Equity Is the Gatekeeper
In 2026, equity decides.
If you own property in Ontario, you may have more options than you think — even if the bank has already said no.
Before assuming you don’t qualify, run the numbers.
👉 Check your equity now:
Your equity deserves more™