Who Funds Private Mortgages in Canada? MICs Explained (2026)

Banks lend out deposits. Private lenders have none to lend, so every dollar has to come from an investor first. In Canada that capital reaches your mortgage through three channels, and the differences show up in places most borrowers never think to look.

Mortgage investment corporations

A MIC pools money from dozens or hundreds of shareholders and lends it as mortgages secured on Canadian property. Your file gets underwritten against a written lending policy, usually by a credit team rather than one person. That means predictable rules, set loan-to-value bands, and a decision that does not hinge on whether one investor happens to like your neighbourhood.

Syndicated mortgages

A syndicate splits a single mortgage among a small group of investors, each holding a registered interest in the same charge. You see it on construction deals and larger commercial files where no single lender wants the whole exposure. The trade-off arrives later: any change to your loan, from an extension to a partial discharge, can need several investors to agree first.

Individual private lenders

One person or one family lending their own capital, almost always placed through a broker they have worked with for years. These lenders can be the most flexible on a story file. They can also run short of funds mid-transaction, which is why a careful brokerage confirms the money is committed before your lawyer books a closing date.

Above all three sits a licensed mortgage brokerage or mortgage administrator. In Ontario those firms are licensed by FSRA, and every province has an equivalent regulator doing the same job. The brokerage arranges the deal and often administers the payments, and the fees on a private mortgage usually pay for both roles. So when a broker tells you the lender is comfortable with your file, there is a fair follow-up. Which lender?

A MIC is not a bank and not a mutual fund. It is a Canadian corporation that qualifies for special tax treatment under section 130.1 of the Income Tax Act, administered by the Canada Revenue Agency. Keeping that status means living inside a tight set of rules.

• At least 20 shareholders at all times, with no shareholder holding more than 25% of the shares.
• At least half its assets held in residential mortgages, cash, or insured deposits.
• Its only business is investing its own funds. It cannot develop or manage real estate.
• Every mortgage it holds must be secured on property located in Canada.
• Net income flows out to shareholders as dividends, which those shareholders are taxed on as interest.

Now read that list as a borrower. A MIC has to keep money working, answer to an audited shareholder base, and stay inside its own lending policy. That is why a MIC file feels structured. There are documented loan-to-value limits, an appraisal requirement, a credit committee, and a renewal decision made on portfolio math rather than mood.

It also explains the pricing. Shareholders are investors expecting a return for funding deals the banks declined, so rates and fees on private money sit above what an A lender charges. What you are buying is speed and flexibility on qualification, not a cheaper loan. How much you can borrow still comes down to how much equity sits in the property, because that equity is the security behind every dollar the fund advances.

Honestly, if nobody can tell you which fund or lender is behind your commitment letter, that alone is reason to slow down and ask for it in writing.

Same property, same borrower, three funding sources, three different experiences. Here is how they line up.

The bank row belongs there for a reason. Most people reach a private mortgage only after an A or B lender said no, and it helps to see the trade you are actually making. Our breakdown of A lenders, B lenders, and private lenders shows where each one stops.

There is one more thing worth knowing about the bank row. The Office of the Superintendent of Financial Institutions sets the underwriting standard federally regulated lenders follow. That is why a perfectly solid self-employed borrower can still fail a bank test on paper. Private capital is not bound by that standard. It is bound by the appetite of whoever owns the money.

Every private mortgage is temporary. You take it to fix something, then you refinance, sell, or renew out of it. The funding source behind the loan quietly decides how smooth that ending turns out to be.

The 4-question funding source check

1. Who is the lender of record, and is it a fund, a syndicate, or one individual?
2. Are the funds already committed, or still being raised for this specific deal?
3. Who approves a renewal or an extension, and how long does that decision take?
4. What does an early payout or a partial discharge cost, and who has to sign off?

Ask those four before you sign the commitment, not three days before your maturity date. A well-run fund answers all four in a single email. When the answers turn vague, you have learned something useful anyway.

Pricing moves with the market too. Policy rate decisions from the Bank of Canada feed into what investors expect from private mortgage money. A lender's appetite this quarter may look nothing like it did last year. Build your exit around the terms in front of you, not the market you are hoping for.

Solid Capital is a Canadian alternative lender for homeowners and business owners the big banks turn away. Our underwriting reads the whole file: the equity, the property, the exit plan, and the story behind the last two years. If a bank has already said no, start an application at solidcapital.ca. It takes about five minutes, there is no impact to your credit to apply, and a Canadian advisor reviews every file personally. You can also see what happens after you apply before you commit to anything.

Money behind a private mortgage is never anonymous. It belongs to somebody, and that somebody has rules, a timeline, and a return they need to earn. Knowing who that is keeps the exit in your hands instead of theirs. Ask the question. One sentence is all it takes.

Is a MIC the same thing as a private lender?

A mortgage investment corporation is one type of private lender. It pools capital from at least 20 shareholders and lends it out as mortgages, so the structure behind the money is institutional even though the loan itself is private. Individual lenders and syndicates are the two other common sources.

Are mortgage investment corporations regulated in Canada?

A MIC qualifies under section 130.1 of the Income Tax Act and files audited annual statements. The brokerages and administrators that arrange or service its mortgages are licensed provincially, by FSRA in Ontario. It is not a federally regulated deposit-taking institution, so it is not supervised the way a bank is.

Can I find out who is actually funding my private mortgage?

Yes. The lender of record appears on your commitment letter and on the charge registered against your title. Your brokerage should tell you plainly whether that lender is a fund, a syndicate, or an individual. If you cannot get a clear answer in writing, treat the silence as information.

Do private mortgage lenders look at your credit score?

They do pull credit, but it carries less weight than the equity in your property and your plan to repay or refinance. A recent bankruptcy or a stack of collections still affects the file. It simply is not the first thing a private lender reads.

Why does a private mortgage cost more than a bank mortgage?

The money comes from investors who expect a return for funding deals that banks decline, and the terms are short, often one to two years. Rates and fees reflect that risk and that timeline. What you are buying is time to fix the issue that caused the decline in the first place.