Quick Answer
Private mortgage rates in Canada depend primarily on loan-to-value (LTV), property quality, and lender structure. Solid Capital lists rates starting at 6.99% and lends up to 85% LTV, while higher-LTV files, second mortgages, and properties with narrower resale markets generally require more lender risk review.
Introduction
Private mortgage rates are not one fixed price for borrowers who do not qualify at a bank. A homeowner with substantial equity and a straightforward exit plan can receive different terms than an applicant borrowing close to 85% LTV or using a second mortgage to consolidate obligations. Private mortgage lenders across Canada generally assess the property first, then the borrower’s plan to repay or refinance. The practical question is not simply whether a private mortgage costs more, but how much equity and lender certainty the file provides.
Key Takeaways:
Lower LTV requests generally create less risk for a private lender.
Private lender terms depend on property, credit, documentation, and repayment strategy.
Compare total loan terms, not just the stated interest rate.
Private Mortgage Rates by LTV in Canada
LTV measures the requested mortgage amount against the property’s current market value, making it one of the clearest indicators of lender exposure. LTV determines the maximum guaranteed mortgage amount based on property value, and is tracked nationally through CMHC's mortgage industry data. Federal underwriting guidance expects federally regulated institutions to impose a maximum LTV of 65% for non-conforming residential mortgages.
Why Lower LTV Usually Means Better Terms
A lower LTV leaves more equity between the loan balance and the property value, which can reduce loss exposure if the lender must sell the property. This is why private lending rates can differ materially even when two borrowers request the same loan amount: the equity position, not income alone, changes the risk profile.
65% LTV: More equity can support pricing discussions; OSFI expects a 65% maximum for non-conforming mortgages.
75% LTV: Property condition and exit planning become more important.
85% LTV: Limited equity increases scrutiny of the full file.
Second position: Existing mortgage priority affects lender risk.
Exit plan: Refinancing or sale timing must be credible.
How to Read a Rate Quote at 65%, 75%, and 85% LTV
Do not treat LTV tiers as published, universal price bands. A 65% LTV request may receive more favourable consideration because the lender has a larger equity cushion. A private mortgage request at 85% LTV may carry a higher rate or additional conditions because the margin for a property-value decline is smaller. For a residential private mortgage, the rate quote should be read alongside lender fees, legal costs, term length, payment structure, prepayment terms, and the stated repayment plan.
For context, residential mortgages used to purchase, renovate, or improve a property must be insured by law when LTV exceeds 80%. Private mortgages are assessed differently from insured bank lending, but the 80% threshold illustrates why higher leverage receives closer attention.
Private Mortgage Lenders Canada: Lender Type and Pricing
Lender type matters because each funding source has a different approval process, risk mandate, and tolerance for non-standard income or credit. A mortgage investment corporation, private individual, and non-bank lender can all provide private financing, but their terms are negotiated from different capital models rather than a single industry rate sheet.
MICs, Private Individuals, and Non-Bank Lenders
A MIC pools investor capital into mortgage loans, while an individual private lender funds a loan directly or through a lending arrangement. A non-bank mortgage lender uses its own underwriting process and may offer a more repeatable process for borrowers who need a clear decision path. These options are different lending structures, not interchangeable labels.
The table below shows what borrowers should compare before accepting a quote. It avoids assumed price ranges because private mortgage pricing is custom to the security, LTV, and repayment plan.
Lender type | Funding structure | Pricing disclosure | Core underwriting focus |
|---|---|---|---|
Mortgage investment corporation | Pooled investor mortgage capital | Custom to the approved file | Security, LTV, and loan mandate |
Private individual | Direct private capital | Negotiated for each transaction | Property equity and exit strategy |
Non-bank lender | Dedicated alternative lending operation | Custom quote with documented terms | Property, borrower profile, and repayment plan |
Solid Capital | Canadian alternative lender | Rates start at 6.99% | Equity, revenue, and full borrower situation |
The most useful comparison is not whether one lender category has a universally lower rate. It is whether the lender can assess the property, requested LTV, documentation, and timeline in a way that matches the borrower’s situation.
Factors That Push Private Lending Rates Up or Down
Private mortgage rates differ from bank rates because a private lender can place greater weight on equity and the property’s saleability when income documentation or credit history does not meet conventional rules. A clean appraisal, a well-maintained property in an active market, and a specific refinance or sale plan can improve the lender’s confidence. Conversely, unusual properties, remote locations, unresolved title issues, recent credit problems, and a thin exit strategy can increase pricing or reduce the approved amount.
Ontario's financial services regulator reports that private lending remains a significant source of financing for borrowers facing affordability challenges, even as market conditions shift, underscoring the role MICs and non-bank lenders play alongside banks. A personalized quote is more useful than a broad market average because it reflects the property's value, existing debt, mortgage position, and repayment plan.
How to Build a Stronger Private Mortgage Application
A strong application gives the lender a complete view of the property and a credible path out of the loan. This matters for self-employed borrowers, investors, and credit-challenged homeowners because private underwriting often looks beyond a conventional income-to-debt formula.
Document the Property, Equity, and Exit Plan
Start with the current mortgage statement, property address, requested amount, and a realistic estimate of value supported by available market information. If the funds solve a temporary cash-flow issue, explain how the loan will be repaid through a sale, business income, conventional refinance, or another identified source. The mortgage application process should also clarify whether the requested financing is in first or second position and whether the lender needs an appraisal or legal review.
Amortization also affects the lending decision because it changes required debt service and the pace at which equity grows. Applicants should understand the payment obligation instead of focusing only on the initial approval.
Match the Loan Purpose to the Right Mortgage Structure
First mortgages, second mortgages, HELOCs, commercial loans, and multifamily financing carry different security and repayment considerations. A borrower exploring residential private mortgage financing should describe the purpose precisely, whether it is debt consolidation, a time-sensitive purchase, renovations, tax obligations, or a bridge to conventional lending.
Business owners should separate property-backed borrowing from operating capital needs. Solid Capital’s private mortgage options include residential, commercial, land, first, and second mortgage structures, which can help borrowers discuss the right security instead of forcing every need into one loan type.
Conclusion
Private mortgage rates are driven by risk that can be explained: LTV, property quality, mortgage position, documentation, and the borrower’s exit plan. Borrowers near 65% LTV may have more flexibility than those seeking financing near 85% LTV, but every file should be assessed on its actual details. For Canadians needing a transparent alternative to strict bank criteria, Solid Capital can be a practical choice when equity, speed, and a human review of the full situation matter. Ask for a complete written quote and compare the total cost and repayment requirements before signing.
Need a clear quote based on your equity position? Contact Solid Capital for a private mortgage review.
Frequently Asked Questions (FAQs)
What are the interest rates for private mortgages in Canada?
Interest rates for private mortgages in Canada are customized to the property, LTV, mortgage position, credit history, documentation, and exit plan rather than set at a universal rate for every borrower. Review private lender mortgage rates alongside the full loan terms.
What is the maximum LTV for a private mortgage?
The maximum LTV for a private mortgage can reach 85% with Solid Capital, although the approved amount depends on the property value, existing debt registered against the property, condition, location, and the lender’s assessment of repayment risk.
How does private mortgage lending work in Canada?
Private mortgage lending in Canada works by securing a loan against real estate, with the lender reviewing the property equity, requested amount, borrower circumstances, and a practical plan to repay, refinance, or sell before finalizing terms. Learn more about how to get a private mortgage in Canada.
Why choose a private lender over a traditional bank?
Choosing a private lender over a traditional bank can make sense when conventional income, credit, or documentation requirements prevent approval, because private underwriting can place greater emphasis on available equity and the borrower’s complete financial situation.
How to get a private mortgage in Canada?
To get a private mortgage in Canada, provide the property address, mortgage statements, requested loan amount, intended use of funds, and repayment plan, then review the lender’s written terms for rate, fees, payment requirements, and security position.
What is an alternative mortgage lender?
An alternative mortgage lender is a non-bank financing provider that evaluates borrowers outside conventional bank criteria, often considering property equity, business revenue, and a realistic exit plan alongside credit and income documentation.
Are there private mortgage options for multifamily properties?
Private mortgage options for multifamily properties are available through lenders that assess the building, rental income, equity, unit count, and financing purpose.
About the Author
James Bennett is a Senior Financing Writer covering private mortgages, business financing, and alternative lending in Canada. His work explains how borrowers can assess mortgage qualification, equity, lender requirements, and repayment plans using clear, practical information.
