When diving in to the world of mortgages in Toronto, you may be overwhelmed by the number of different types available. One type, a private mortgage, is when a mortgage is offered by individuals rather than the usual banks. It gives you freedom and flexibility in attaining a mortgage with less requirements. Private mortgages usually have faster load approvals than traditional banks. It is a good type of mortgage if you like to flip properties. Some houses need a lot of work to be ready to sell again, and private mortgage loans can help the “flipper” buy the house and fix it up right away.  What are some other benefits to getting a private mortgage in Toronto? What should you keep in mind?


  • A private mortgage can be used to fix house issues and renovations at home or work.
  • Easy to apply for a private mortgage
  • It can be used to pay for expenses such as education fees, debts or medical bills.
  • This type of mortgage can financially assist you when you have lost a job.
  • A private mortgage helps you when you have a low income and can’t carry a regular mortgage.

Keep in Mind

  • Private mortgages have short terms. Many traditional mortgages have terms of 25 or 30 years to pay off the loan.
  • Private Mortgages are usually expected to pay back in 24 months.
  • Extra fees often come with private mortgages. There are legal fees, tender fees, and lender fees that could be added on top of the loan.
  • You can expect higher interest rates with this type of loan. Compared to traditional mortgages, private mortgage interest rates can be doubled.
  • When it comes to income, confirmable income is preferred to non-confirmable income. Confirmable income can be proven through Notices of Assessment, non-confirmable incomes are usually self-employed or commission-based incomes.

Private mortgage brokers will take the property type and value into consideration. The mortgaged property needs an appraisal and be in good condition before you can get an approval. Lenders just want to make sure their investment is secure if someone defaults on the mortgage. Usually, when it comes to down payments, a 15% downpayment is needed to be an approved client. If you can make a larger downpayment, it is a good idea to do so. A larger downpayment will make it easier for you to get approved, lenders have less risk, and get a lower interest rate.

Don’t hesitate to contact a Toronto private mortgage broker to answer any questions you may have. We are here to help and guide you as you search for the perfect financial solution to your needs.

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