MuskokaMortgageTalk with MackenzieShort-term bridge financing
Specialty LendingPrivate mortgages are fast and flexible — and more expensive. They're a tool for short-term situations: bridging a gap, fixing credit, dealing with tax arrears, or buying time. The key question isn't just "can I get approved?" — it's "how am I getting out of this?"
Quick answer
Private mortgages are short-term, equity-based loans from private investors instead of banks. They're faster and more flexible on credit and income, but more expensive. They make sense as a bridge — buying time to fix credit, file taxes, or sell a property — not as a permanent solution. Always have an exit plan before signing.
Private mortgages are priced for speed and flexibility. Interest, setup fees, legal work, and appraisal costs should be reviewed together. The question is whether the total cost is worth the problem being solved.
The right term matches the exit plan: credit repair, tax payment, sale, refinance, or completed construction. Without that plan, renewal at private rates can become very expensive.
Private lenders still review the property. Access, seasonal use, appraisal support, and insurance can affect approval even when equity looks strong.
01The fileIncome, credit, documents, and timing.
02The propertyCondition, access, use, and lender fit.
03The decisionCost, conditions, flexibility, and exit.
Urgent refinancing, tax arrears, bruised credit that needs time to repair, estate or separation situations, construction complexity, or a gap before institutional financing becomes realistic.
Chasing a lower rate isn't a good reason. Private mortgages come with higher rates, fees, and shorter terms. If there's no clear strategy, the costs can outweigh the benefit.
Before signing, know what needs to happen next: sell the property, refinance to a bank or alternative lender, improve credit, file taxes, reduce debt, or finish construction. Without a realistic exit, a short-term solution can become an expensive renewal.
Going deeper
Private mortgages are fast and flexible — and more expensive. They are a tool for short-term situations: bridging a gap, fixing credit, dealing with tax arrears, or buying time. The exit plan matters more than the rate.
How it works
Sourced answers
Private lending should be reviewed as a short-term bridge with clear cost, risk, and repayment logic.
Private lending should normally be considered after the decline reason is understood and bank, credit union, monoline, or alternative lender options have been reviewed. FSRA emphasizes that private mortgage terms, costs, risks, and suitability should be clearly explained. A private mortgage may help with timing, credit repair, tax arrears, or property issues, but it should come with a documented exit plan.
FSRA private mortgage guidancePrivate mortgages often have higher rates, fees, and shorter terms than institutional lending. The key question is not only whether the file can be approved today, but how the mortgage will be paid out or replaced before renewal risk becomes expensive. Exit options may include sale, refinance, credit repair, completed tax filings, lower debt, completed construction, or a return to a bank or B-lender path.
FSRA private mortgage guidanceComparison
Different lenders serve different situations. The goal is finding the lowest-cost option that will actually approve your file.
| Factor | Prime Lender | B-Lender (Alternative) | Private Lender |
|---|---|---|---|
| Typical borrower | Clean income, strong credit, standard property | Self-employed, near-prime credit, slightly higher ratios | Urgent timing, bruised credit, equity-focused |
| Cost | Lowest rates and fees | Higher rates and lender fees | Highest rates, lender fees, broker fees possible |
| Documentation | Standard T4/NOA, pay stubs, clean credit | More flexible — bank statements, contracts, corporate docs | Primarily equity and property value |
| Term | 1–10 year terms available | Often 1–2 year terms | Usually 6 months–2 years |
| Exit strategy needed | No | Helpful — plan to move toward prime | Essential — must have a clear path out |
| Speed | Standard underwriting timeline | Similar to prime | Can close faster |
Private mortgages are short-term tools, not permanent solutions. Always have an exit plan before signing.
Questions
Cost, timing, exit plans, and when private lending beats — or loses to — other options.
B-lenders often fit near-prime files with higher rates but more structure. Private lending is usually shorter, more expensive, and more equity-driven. The exit plan differs for each.
A good exit plan names what will change, when, and which lender lane is realistic next. Without that, private financing becomes an expensive habit instead of a bridge.
We will compare total cost and exit plan before you sign — private only when it is the right tool.