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Today's lowest
5-year mortgage rates

4.89%

Fixed Rate Variable Rate

Private Mortgage

Whether it’s your first home or you’re looking to invest in a property, we make sure your rate is great. We don’t work on commission. We work to find the best loan for your needs, not ours. For these reasons and more Lower is Canadians’ go-to place for their mortgage.

  • Get pre-approved so you can buy with confidence
  • Shop for homes knowing you’ll get the best rate
  • Rely on our support for a stress-free experience

The right source for
Canadian mortgages

Lower is Canada’s premium mortgage broker offering mortgages for every type of new home, whether it's to live in or an investment.

  • See the lowest rates

    See the lowest rates

    We’ll check 40+ lenders and 10,000 products in the market.

  • Get expert advice

    Get expert advice

    Speak with your trusted Lower advisors anytime.

  • We do the hard work

    We do the hard work

    Lower advisors will do all the application admin.

Canadians love
Lower

Rated 4.9 / 5 on Google, Facebook, Trustpilot, Comparewise and others.

  • Brian Molnar
    Brian Molnar

    Google

    Buying a home for your family is so important. Ammar made us feel comfortable with at ease with this process. He took his time to understand our needs but was very quick with the process.

  • Karen Austin
    Karen Austin

    Comparewise

    I bought my first home a few years back and used @lowerdotca. It was a great experience so I called them when I was ready to purchase my second house. Ammar and his team go above and beyond.

  • Valerie Fincher
    Valerie Fincher

    Comparewise

    We had a great experience with Ammar and his team. He explained us all of our options without us feeling the pressure or rushed. I highly recommend.

  • Jeff Mahlum
    Jeff Mahlum

    Comparewise

    I was extremely nervous being a first time home buyer in Toronto. With prices skyrocketing I wasn't sure this was the right move but after speaking to Ammar, he made me feel confident.

  • Clementine Mason
    Clementine Mason

    Google

    Ammar went above and beyond our expectations, answering all of our questions and securing us an even better rate that we'd hoped for! The entire process was very smooth and we will be recommending his mortgage services.

  • Averi Blackwell
    Averi Blackwell

    Comparewise

    I was working with a broker before and it was a nightmare. Thank goodness I found Ammar. He was always quick to respond to help us. We will definitely be using Ammar when it’s time to renew our home.

  • Melissa Dodds
    Melissa Dodds

    Twitter

    I was anxious being a first-time home buyer in the Toronto market. Ammar was referred to me by a friend of the family and he definitely made the process much easier to work through!

  • John Hartman
    John Hartman

    Comparewise

    We really appreciated Damien’s patience and compassion through this entire process. We are very happy with our rate and how easy he made our experience.

  • Ruben Gonzalez
    Ruben Gonzalez

    Comparewise

    Ammar was amazing to work with from start to finish. Found us such an excellent rate. He went above and beyond for us.

  • Nicola Weber
    Nicola Weber

    Twitter

    @lowerdotca helped me with my purchase of my third business property. He found us the best rates. I would recommend Shawn if you need to speak to anyone.

  • Brooke Cheng
    Brooke Cheng

    Twitter

    My family member recommend @lowerdotca and to speak to Ammar. He doesn't disappoint. I was very satisfied with his service.

  • Fredy Pollich
    Fredy Pollich

    Comparewise

    My previous mortgage broker retired so I had to find a new one. When I contacted Lower. The whole team is amazing. I was impressed right off the bat. Very professional.

  • Tricia Seward
    Tricia Seward

    Twitter

    @lowerdotca was recommended to me by a fellow business owner who used their services to refinance their property. I found Ammar to be knowledgeable and efficient in helping us to reduce our rate and liquidate the capital we needed to expand our business.

  • Judson Flatley
    Judson Flatley

    Google

    So glad I found Damien and Lower. The last time I had to renew my mortgage was a headache. Damine is familar with the challenges of applying as a self-employed individual and got our re-financing done without any trouble.

  • Josephine R
    Josephine R

    Google

    Lower gave us confidence in our purchase. I won’t even hesitate calling because they are just that great! Very easy to understand and work with.

  • Albert Taylor
    Albert Taylor

    Comparewise

    I've worked with Lower many times. I highly recommend them to my clients who are in need. They work hard to get the best rates.

  • William Westley
    William Westley

    Comparewise

    I was referred to Damien because I wanted to purchase the building my business is in when my landlord decided to sell. We went over all of my options and I ended up not only managing to purchase the building but also get extra funds to

  • Javier Garcia
    Javier Garcia

    Google

    Very reliable team. They are straight forward which I liked. They are honest but they also work very hard to find the best rates for you.

  • Michele Peers
    Michele Peers

    Google

    I had the pleasure of speaking to Shawn about a few things. Including purchasing property for my business and we got approved very quick. I will be using his services for my business in the future.

  • Donal Lynch
    Donal Lynch

    Twitter

    I used @lowerdotca to help with the purchase of my second investment property. Damien made the process quick and straightforward, which I appreciated as I have a hectic schedule.

FAQs about Private Mortgages

Have a different question? Contact us today.

How much is private mortgage insurance?

Private mortgage insurance (PMI) costs vary depending on the size of your down payment, loan amount, and credit score. They also differ from lender to lender. Typically, PMI rates range from 0.3% to 1.5% of the original loan amount per year.

Are private mortgage lenders safe?

Private mortgage lenders can be a safe and legitimate financing option. But it’s essential to conduct thorough research to ensure the lender has a strong reputation and a history of ethical business practices.

Can I refinance a private mortgage?

Yes. Refinancing involves replacing your current loan with a new one, typically with more favorable terms. These may include a lower interest rate or a more extended repayment period. Bear in mind that refinancing a private mortgage may come with additional fees. So, it's essential to weigh the costs and benefits before proceeding.

In the complex world of home financing, the private mortgage option has emerged as an alternative to traditional lending options. These unconventional loans can be a lifeline for borrowers facing challenges securing funding through traditional banks and mortgage institutions. But what does this type of mortgage entail?

Private mortgages offer a flexible financing alternative, providing quicker approvals and accommodating unique financial situations. However, they come with higher interest rates and fees than conventional mortgages.

To find the best private mortgage lender, consider various factors such as fees and terms. And explore reliable options like Lower, which can provide tailored solutions and help improve your credit score.

This blog post will delve into the ins and outs of private mortgages. We’ll explore their advantages and disadvantages, rates and fees, and the types of borrowers who can benefit from them. We’ll also guide you in finding the best private mortgage lender.

What is a Private Mortgage?

A private mortgage is a short-term, interest-only loan from non-traditional lenders or individuals for home purchases. These loans cater to borrowers with unique income sources, property types, or shorter ownership plans that may not qualify for conventional mortgages.

Private lenders offer more flexibility and less stringent requirements for the 5 Cs of credit: capacity, credit, capital, collateral, and character. Since the 2018 implementation of stricter regulations by the OFSI, some low-risk borrowers have opted for private mortgages despite higher costs.

private mortgage rates in canada - spring mortgage

Private Mortgage Lenders in Canada

Private mortgage lenders can include individuals, Mortgage Investment Corporations (MICs), and syndicates. And they provide alternative financing options for borrowers who may not qualify for traditional mortgages.

These lenders, known as B lenders or subprime mortgage lenders, operate outside strict regulations. And they typically cater to those with poor financials or lower credit scores.

Data from the Canada Mortgage and Housing Corporation (CMHC) reveals that non-bank lenders originated $183.61 billion in mortgage loans in 2021. And nearly $100 billion was from private lenders like credit unions, mortgage finance companies (MFCs), mortgage investment entities (MIEs), and trust companies. This emphasizes their crucial role in Canada’s housing market.

Types of Private Mortgages Offered

Private mortgage lenders offer a variety of loan products, many of which parallel those provided by traditional banks. Some common types include:

  • First Mortgages: These loans finance the purchase of a home and require regular installment payments, plus interest, over the amortization period. In Canada, first mortgages typically involve a 5% down payment, a five-year term, and a 25-year repayment period.
  • Second Mortgages: A second mortgage is an additional loan taken out on a property that already has a primary mortgage. Since second mortgages are repaid after the first mortgage in case of default or sale, they generally come with higher interest rates due to the increased risk for lenders.
  • Bad Credit Mortgages: Designed for borrowers with poor credit scores, these mortgages cater to those who may not qualify for conventional loans. However, they often come with higher interest rates.
  • Refinancing: Replacing an existing mortgage with a new loan, refinancing is typically done to secure lower interest rates, change loan terms, or shorten the amortization period.

Private lenders may also specialize in particular areas. These include the following:

  • Bad credit
  • Second or third mortgages
  • Refinancing for debt consolidation or renovations
  • Home equity loans
  • Loans for commercial, industrial, or agricultural properties

The Pros and Cons of Private Mortgages

Pros:

  • Short and quick approval process: Private mortgages often have a faster approval process than conventional mortgages.
  • Easier qualification: Private lenders focus more on the property’s value than the borrower’s credit history or income.
  • No stress test: Borrowers don’t have to pass the stress test required for traditional mortgages.
  • Debt consolidation: This type of mortgage can help consolidate high-interest debts using the available home equity.
  • Financing for purchase, plus improvements or renovations: Private lenders can finance the purchase and renovation costs of properties needing attention.
  • Short-term and bridge loans: Ideal for temporary financing until a more permanent option is secured.

Cons:

  • Higher interest rates: It typically comes with higher interest rates than traditional mortgages.
  • Interest-only payments: These payments usually do not contribute to reducing the principal amount of the loan.
  • Extra fees: Private mortgages often come with additional fees, such as lender, broker, and legal fees.
  • Harsh penalties: Private lenders may foreclose on properties faster than traditional lenders if borrowers fall behind on payments.
  • Lack of licensing: In some instances, private mortgage lenders may not have the same experience, education, or requirements as licensed mortgage lenders.
private mortgage - spring mortgage

Private Mortgage Rates and Fees

When evaluating your options, it’s crucial to account for fees, which may be higher than traditional mortgages. These include:

Since private mortgage lenders in Canada aren’t subject to standardized regulations, they set their fees and lending conditions. And comparing lenders based only on interest rates may not show the total cost of borrowing.

Therefore, consider all fees, such as lending, brokerage, legal and appraisal, setup, and administration fees, when deciding. A private mortgage calculator is an excellent way to determine the potential costs.

Who Can Benefit from a Private Mortgage?

Private mortgages cater to a diverse range of borrowers facing unique financial circumstances or property preferences. The following groups may find it a valuable alternative to traditional financing options:

Finding the Best Private Mortgage Lender

Working with a mortgage brokerage can simplify finding the best private mortgage lender. An experienced broker can guide you through options and handle negotiations and paperwork.

However, direct lenders like Lower offer tailored solutions for those with diverse credit scores. This private lender delivers funds as quickly as the same day of approval. It also provides various mortgage products and helps improve your credit score by reporting monthly to TransUnion and Equifax.

Choosing Lower as your go-to mortgage partner in Canada will ensure a seamless lending experience.

Private Mortgage Conclusion

Private mortgages are a valuable option for those facing challenges with traditional financing. Despite higher rates and fees, they offer faster approvals and accommodate unique financial situations.

When selecting a private mortgage lender, consider all aspects, including fees and terms. And partner with a reliable and experienced provider like Lower for the best results.