Private & Alternative Lending · BC & Alberta
Expensive money, used deliberately, for a short time.
A private mortgage is a tool with a narrow job: solve a specific problem that conventional lending cannot solve right now, and get you back to conventional lending. If there is no exit, there is no deal worth doing.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
What it is
A different lender, a different question.
Private mortgages are funded by individuals, mortgage investment corporations and private funds rather than by banks. Because the capital is not deposit-based, the lender is not bound by the same qualification framework, and the underwriting question changes.
A bank asks primarily whether you can service the debt. A private lender asks primarily what the property is worth, how much equity sits underneath the loan, and how it gets repaid. That shift is why a private mortgage can be arranged in circumstances where an institution will not lend at all.
It is also why it costs more. Higher interest, lender fees and broker fees are the normal structure, and the total cost of borrowing on a private mortgage is materially higher than conventional financing. That is not a criticism of the product. It is the price of capital that takes risk an institution has decided not to take, and you should go in knowing it.
- Underwritten primarily on the property and the equity position
- Interest rates and fees materially above conventional financing
- Terms are usually short, frequently interest-only
- Lender and broker fees disclosed in writing before you commit to anything
- Legal, appraisal and administration costs on top
- An exit strategy is not optional; it is the reason the loan exists
Private mortgages carry materially higher borrowing costs than institutional financing and are not suitable for every situation. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Suitability
When it fits, and when the honest answer is no.
I turn down private files regularly, and it is usually for one of the reasons in the right-hand column. A private mortgage that solves a temporary problem is a good piece of work. A private mortgage that postpones an unsolvable one makes the situation worse and more expensive.
Situations where it can make sense
A time-sensitive purchase or closing that conventional timelines cannot meet
A credit event that will resolve with time, where the equity is real
Income that is genuine but cannot yet be documented the way an institution requires
Bridging between a purchase and a sale
Renovation or construction funding before a property is conventionally financeable
A short-term business need secured against real estate, with a clear repayment source
Situations where the answer should be no
There is no realistic path back to conventional financing
The payment is not affordable even on an interest-only basis
It is being used to service other debt rather than to solve something
The equity is thin enough that a soft market erases it
The plan depends on a property selling at an optimistic price
Nobody has quantified the total cost of borrowing over the full term
Private lending is not inherently better than institutional lending. In most circumstances it is worse and should be a considered second choice. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
The exit
How the loan ends, decided before it starts.
Every private mortgage should be arranged with a specific answer to one question: what repays this, and when? These are the answers that actually hold up.
Exit 01
Refinance into conventional financing
The most common. The term buys time for whatever blocked institutional lending to resolve: credit rebuilding, a second year of business financials, a property becoming conventionally financeable. The plan should name what changes and roughly when.
Exit 02
Sale of the property
Clean when the property is genuinely saleable and the timeline is realistic. Risky when it depends on achieving an optimistic price in a market that may not cooperate.
Exit 03
Completion of a project
On renovation or construction files, the exit is the finished property being financeable or sold. Timeline risk here is real and should be built into the term rather than hoped away.
Exit 04
A known liquidity event
A maturing investment, a business transaction, funds arriving from a defined source. This works when the event is genuinely committed and not merely anticipated.
Exit 05
Renewal of the private facility
Sometimes necessary, and it should be treated as a fallback rather than a plan. Renewing private debt repeatedly is a sign the original problem was never solved, and the cost compounds.
Where the exit is unclear, the responsible advice is usually not to proceed. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
Mortgage Tools
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All calculator results are estimates for illustration only. They are not a commitment to lend, a rate offer, a pre-qualification, a pre-approval, or financial advice. Actual qualification depends on a full review of your credit, income, documentation and the policies of individual lenders. Tax rules and insurance premiums are subject to change.
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Related
Where people usually go next.
Self-Employed Mortgages
Many private files exist because business income could not be documented conventionally yet. Often that is solvable.
Read more →
Mortgage Refinancing
Refinancing back into conventional financing is the exit on most private mortgages.
Read more →
Construction Financing
Land, servicing and early-stage builds frequently begin with private capital.
Read more →
Private lending questions
The questions worth asking before you sign one.
General information for British Columbia and Alberta. Private mortgages carry materially higher borrowing costs than conventional financing.
What does a private mortgage cost?
Materially more than conventional financing, and the total is more than the interest rate suggests. Expect a lender fee and a broker fee, plus legal, appraisal and administration costs. Every one of those will be in writing before you agree to anything, and the number that matters is the total cost of borrowing over the full term, not the monthly payment.
Is a private mortgage a bad idea?
Not inherently, but it is a second choice. If an institutional lender will take your file, that is almost always the better outcome and I will tell you so. Private financing earns its place when it solves a specific, temporary problem that conventional lending cannot solve right now. Used that way it is a sensible tool. Used to postpone an unsolvable problem it makes things worse.
How long are the terms?
Usually short, frequently a year or less, and often interest-only. The structure is designed around an exit rather than around long-term ownership of the debt.
Will my credit score matter?
Less than it would to a bank, because the underwriting weighs the property and the equity more heavily. It is not irrelevant, and a lender will still want to understand the story behind the credit history and, importantly, whether the payments are affordable.
What if I cannot repay at the end of the term?
This is the risk, and it deserves a direct answer. Options are renewing the facility at further cost, refinancing elsewhere if the file has improved, or selling. If none of those is available, the lender has security against your property and can enforce it. That is precisely why the exit is settled before the loan is arranged rather than after.
Can a private mortgage be a second mortgage behind my bank?
Often yes, and that is a common structure when the first mortgage carries a rate worth keeping or a penalty that makes breaking it uneconomic. The second lender sits behind the first in priority, which is part of why it prices higher.
How quickly can it fund?
Faster than institutional lending as a rule, which is frequently the entire reason for using it. The actual timeline still depends on the appraisal, the lawyers and the specific lender, so I would rather give you a realistic date once I have seen the file than a number that sounds good now.
