What Are the Requirements to Get a Private Mortgage in BC?

January 31, 2026 | Posted by: Alex Vinarski

What Are the Requirements to Get a Private Mortgage in BC?

If traditional banks have said 'no' to your mortgage application, you might feel like your options are limited. However, for many homeowners and investors in British Columbia, a private mortgage is the key to unlocking financing. Private mortgages are known for their flexibility and speed, but they do have specific requirements that differ significantly from a bank.

As a mortgage broker specializing in private lending, I guide clients through this process daily. Let’s break down exactly what you need to qualify for a private mortgage in BC.

Core Principle: Equity is King

The most important requirement for a private mortgage is equity. Private lenders are primarily secured by the value of the property itself. Your income, credit score, and debt load are secondary considerations. This makes private lending a powerful solution for:

  • Self-employed borrowers

  • Those with past credit issues (bankruptcies, consumer proposals)

  • Investors needing quick financing

  • Anyone with a complex financial situation

The 4 Key Requirements to Qualify

1. Significant Property Equity (The #1 Factor)
The Loan-to-Value (LTV) ratio is the cornerstone of private lending. This is the loan amount divided by the property’s current market value. Most private lenders in BC will lend:

  • Up to 75% LTV for a houses or town houses.  (on exception up to 80%).

  • Up to 65% on condos (can be done up to 75%, but at higher rates and fees).

2. A Realistic Exit Strategy (Your Repayment Plan)
Private mortgages are short-term solutions, typically with 1-3 year terms. The lender needs to know how you intend to repay the loan at maturity. Common exit strategies include:

  • Selling the property.

  • Refinancing with a traditional bank or B-lender (once your credit or income improves).

  • Using other funds (investments, sale of another asset).

3. Proof of Property Value: The Appraisal
An approved, independent appraisal is almost always required to confirm the property’s current market value and establish the exact LTV.

What is NOT a Strict Requirement (The Flexibility)

  • Income Verification: Not required. While some information may be requested, lenders do not need T4s, pay stubs, or tax returns to qualify you.

  • Credit Score: No minimum score. Discharged bankruptcies, consumer proposals, and low credit scores are acceptable. The deal is assessed on its overall merit.

  • Debt-Service Ratios: The strict TDS/GDS ratios used by banks do not apply.

The Process & Associated Costs

To meet these requirements, you will need to cover some standard costs:

  1. Application and credit bureau: Provide basic personal and property information. 

  2. Appraisal: Pay for a lender-ordered appraisal (~$400-$600). Only up front fee. All other fees deducted from the mortgage. 

  3. Legal Fees: You will pay for both your lawyer and the lender's lawyer to draft and register the mortgage (~$2,500-$4,000 total), deducted from the loan proceeds at closing.

  4. Lender/Broker Fee: A one-time fee (typically 2% for a 1st mortgage, 4% for a 2nd) is deducted from the loan proceeds at closing.

Why Use a Mortgage Broker for a Private Mortgage?

Navigating the private lending market alone can be risky. As your broker, I:

  • Match you with the right lender from my vetted network.

  • Negotiate the best possible terms (interest rate, fees, flexibility).

  • Ensure full transparency so you understand all costs.

  • Manage the entire process smoothly and efficiently.

Is a Private Mortgage Right for You?

If you have significant equity in a BC property and a clear plan for the future, a private mortgage can be a strategic, short-term financial tool to achieve your goals—whether that’s purchasing a new property, consolidating debt, or preventing foreclosure.

More information on private mortgages here: https://www.ipotekacanada.com/index.php/private-mortgages

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