Is It Easy to Get a Private Mortgage in Canada?
June 14, 2026 | Posted by: Alex Vinarski
Is It Easy to Get a Private Mortgage in Canada? The Honest Answer
If you've been turned down by a bank, you might be wondering whether a private mortgage is the easy way out. The short answer is: it's easier to qualify, but it's not a shortcut you should take without understanding the costs and responsibilities.
Let me explain what 'easy' really means when it comes to private mortgages in Canada.
Why Private Mortgages Are Easier Than Bank Mortgages
Compared to traditional bank financing, private mortgages are significantly easier to qualify for in several key ways:
✅ No Income Verification
Banks want to see tax returns, pay stubs, and T4s. Private lenders focus on your property's equity. If you're self-employed, have variable income, or simply can't prove your earnings on paper, a private mortgage removes that hurdle.
✅ Credit Score Is Not a Deal-Breaker
Past bankruptcy? Consumer proposal? Missed payments? Private lenders evaluate your application based on the value of your home and the equity you have, not your credit history. Many clients with credit scores in the 500s get approved.
✅ Faster Approval
A bank mortgage can take 2-4 weeks (or longer) to approve. A private mortgage can often be approved in 4-48 hours and funded within 3-10 days. If you need to close quickly on a property or access emergency funds, that speed is invaluable.
✅ Less Paperwork
No need to dig up years of tax returns, business financial statements, or complicated debt-service ratios. The core requirements are:
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An application
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A property appraisal
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A credit check (for information, not necessarily to disqualify)
Where Private Mortgages Are Not 'Easy'
While qualifying is easier, private mortgages come with trade-offs that make them not the right choice for every situation.
❌ Higher Costs
Private lenders take on more risk, so they charge more:
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Interest rates: Typically 5.5%-8.9% for 1st mortgages(vs. 3-5% for banks), and from 8.9% to 14% for second mortgages
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Lender fees: 1-2% for 1st mortgage and 2-4% on second mortgage of the loan amount, deducted at closing
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Legal fees: You pay for both your lawyer and the lender's lawyer ($2,500-$3500 total)
These costs make private mortgages best suited for short-term needs (1-3 years), not long-term financing.
❌ You Need Significant Equity
Private lenders typically lend up to 65-75% of your home's value for a first mortgage. That means you need at least 25-35% equity. If you have little equity, a private mortgage won't work.
Who Is a Private Mortgage 'Easy' For?
| Your Situation | Is a Private Mortgage Easy? |
|---|---|
| Self-employed with strong equity but low taxable income | Yes – equity is what matters |
| Past bankruptcy or consumer proposal, now have 35%+ equity | Yes – lenders focus on asset, not history |
| Need funds in 5-10 days to close a deal | Yes – banks can't move that fast |
| Good credit, stable income, plenty of equity | No – a bank mortgage would be cheaper and better for you |
| Very little equity (under 25%) | No – private lenders need a safety cushion |
The Bottom Line
Getting a private mortgage is easier than a bank mortgage if your challenge is income verification or credit history. It's not easier if you're looking for the lowest cost or a long-term solution.
Think of a private mortgage as a strategic bridge—it gets you where you need to go when the traditional path is blocked. But like any bridge, you need to know where you're going on the other side.
More information on private mortgages here: https://www.ipotekacanada.com/index.php/private-mortgages
