What makes a private mortgage different
Banks approve borrowers. Private lenders approve properties and plans. A bank looks first at your income, credit score, debt ratios and the federal stress test. A private lender looks first at the value and marketability of the property, how much equity remains, and how you will repay the loan at the end of the term. That shift is why private mortgages can help people who are self employed, rebuilding credit, facing arrears, or simply out of time.
Who private lenders are
GTA private lending comes from individual investors, syndicated groups and mortgage investment corporations (MICs) that pool investor capital. Lenders and brokers in Ontario are regulated by the Financial Services Regulatory Authority of Ontario (FSRA), and every private mortgage is registered on title through a lawyer, just like a bank mortgage.
Typical private mortgage terms in the GTA
Most private mortgages run 6 to 24 months, with interest only payments and combined loan to value up to 85% on strong GTA properties. Lower ratios usually earn better pricing. Rates and fees vary by lender, property and risk, and are always disclosed in writing before you sign.
When a private mortgage makes sense
A private mortgage is a strong tool when it solves a specific problem and has a clear exit: stopping a power of sale, paying CRA or property tax arrears, closing a purchase on time, bridging between properties, or consolidating debt while credit recovers. It is not designed to be permanent financing.