In 2026, tighter underwriting, appraisal sensitivity, and stricter debt-ratio enforcement have pushed more Ontario homeowners toward private mortgages.
This is your complete, no-nonsense guide to how private mortgages work in Ontario — and whether one is right for you.
What Is a Private Mortgage in Ontario?
A private mortgage is a short-term, equity-based loan funded by private lenders instead of major banks like Royal Bank of Canada or TD Canada Trust.
Unlike institutional lenders, private lenders focus primarily on:
✅ Property value
✅ Loan-to-value ratio (LTV)
✅ Exit strategy
⚠️ Less emphasis on credit score or strict income verification
In Ontario, most private mortgages are:
6–24 month terms
Interest-only payments
8%–12% interest (depending on risk + LTV)
2%–4% lender fee
They are designed as temporary solutions — not permanent financing.
Why More Ontario Homeowners Are Using Private Mortgages in 2026
Across Ontario, especially in Toronto and Vaughan, borrowers are turning to private lending for very specific reasons:
1️⃣ Mortgage Renewal Denied
Banks are re-evaluating files at renewal. If income changed, property value dropped, or debt ratios increased — you may not qualify again.
2️⃣ Bad Credit or Consumer Proposal
Private lenders look at equity first. A bruised credit score does not automatically eliminate options.
3️⃣ CRA Tax Arrears
Traditional lenders won’t refinance if taxes are outstanding. A private mortgage can consolidate and clear CRA debt.
4️⃣ Notice of Sale / Power of Sale Risk
If you’ve received legal notices, speed matters. Private lenders can close in days — not weeks.
5️⃣ Self-Employed Income Challenges
Stated income or inconsistent earnings often fail bank stress tests.
6️⃣ Bridge Financing
Buying before selling? Private capital can bridge the gap.
Private Mortgage Rates in Ontario (2026)
Let’s address the biggest question:
Why are private mortgage rates higher?
Because risk and flexibility are higher.
Typical Ontario private mortgage pricing in 2026:
| Loan-to-Value | Interest Rate Range | Lender Fee |
|---|---|---|
| Under 60% LTV | 8% – 9.5% | 2% |
| 60–70% LTV | 9% – 11% | 2% – 3% |
| 70–75% LTV | 10% – 12%+ | 3% – 4% |
Rates depend on:
Property type (detached vs condo vs land)
Location
Exit strategy
Borrower profile
Market liquidity
Private lending is about risk-adjusted capital, not retail mortgage pricing.
How Fast Can You Close?
One major advantage:
⚡ Speed
A structured private lender can close in:
48 hours (urgent scenarios)
3–7 business days (standard files)
The process typically involves:
Property valuation
Title search
Legal review
Commitment signing
Funding
In urgent cases (power-of-sale, tax arrears), speed can literally protect your equity.
What Are the Risks of a Private Mortgage?
Private mortgages are powerful — but not casual.
Risks include:
Higher cost of capital
Short term structure
Strict maturity dates
Prepayment penalties in some cases
That’s why working with a licensed, disciplined brokerage matters.
In Ontario, mortgage brokerages are regulated by the Financial Services Regulatory Authority of Ontario (FSRA).
Lendworth operates through:
Lendworth Financial Corp.
Lendworth Asset Management Corp.
Lendworth Mortgage Investment Corporation
Structured underwriting, clear exit planning, and conservative LTVs protect both borrowers and investors.
What Properties Qualify for Private Mortgages?
In Ontario, private lenders typically fund:
Detached homes
Semi-detached
Townhouses
Condominiums
Rural residential
Land (case-by-case)
Small commercial
Construction projects
Location matters. Properties in strong markets like:
Mississauga
Markham
Richmond Hill
Barrie
…generally receive stronger leverage options.
How Do You Qualify?
Private mortgage approval focuses on three pillars:
1️⃣ Equity
Most lenders cap at 75% LTV.
Example:
Property value: $1,000,000
Maximum loan: $750,000
2️⃣ Exit Strategy
How will the loan be repaid?
Sale of property
Bank refinance
Business liquidity event
Asset restructuring
3️⃣ Clear Title & Legal Standing
No unresolved ownership disputes.
Private Mortgage vs Bank Mortgage: Key Differences
| Bank | Private Lender |
|---|---|
| Income-based | Equity-based |
| Stress test required | No stress test |
| 3–6 week closing | 2–7 day closing |
| Lower rate | Higher flexibility |
| Strict credit thresholds | Credit considered but not decisive |
Different tools for different situations.
Is a Private Mortgage Right for You?
A private mortgage makes sense if:
You need short-term liquidity
You have strong equity
You have a defined exit plan
You were declined by traditional lenders
You are restructuring debt strategically
It is not ideal as a long-term lifestyle mortgage.
The Bottom Line: Equity Is Leverage
In 2026, Ontario’s lending environment is tighter. Appraisals are scrutinized. Debt ratios are enforced aggressively.
But if you have equity, you still have options.
A properly structured private mortgage can:
Protect your property
Stop power-of-sale
Clear tax arrears
Buy time
Preserve long-term wealth
The key is working with a disciplined lender — not a last-minute solution.
Speak With a Decision-Maker
If you need clarity on your situation:
Same-day file review
Confidential analysis
Equity assessment
Transparent pricing
Visit: www.lendworth.ca/borrow
Or call: 905-597-1225
Your equity deserves structure — not stress.