Direct answer
A private mortgage may make sense in Ontario when a borrower has a clear short-term financing need, enough property equity, an acceptable property and a realistic exit plan, but cannot currently meet conventional lender requirements. It can be more expensive and should be compared by total cost, not just the interest rate.
Costs to compare
| Cost | What to ask | Why it matters |
|---|---|---|
| Interest | Is it paid monthly, prepaid or added to the balance? | Affects cash flow and final payout. |
| Lender fee | How much, and when is it paid? | Can materially change the total cost. |
| Broker fee | Is a broker fee payable for this file? | Must be disclosed before proceeding. |
| Legal and appraisal | Who pays and what is required? | Private files often need independent legal work and valuation. |
| Renewal or default costs | What happens if the exit takes longer? | The backup plan matters before signing. |
Exit plan questions
- Will the exit be a refinance, sale, renewal, business proceeds or another documented source?
- What needs to change before an institutional lender can review the file again?
- What happens if property value, credit, income or timing changes?
- Can the borrower carry payments and fees if the term extends?
How James reviews private mortgage files
James Wang reviews the purpose, equity, costs, risks and exit plan before discussing a private option. The review should make the trade-offs clear before the borrower decides whether to proceed.
Compliance note: Private mortgage availability, costs, rates, terms and approval are subject to lender review, property value, borrower eligibility and legal documentation.
Sources
James Wang
Mortgage Broker · Fast Approve Financial Inc.
Updated September 21, 2026