If you are looking at a private mortgage in Ontario this fall, here is the short answer: expect roughly 7–12% on a first mortgage and 10–14% on a second, based on rate ranges published by Ontario brokerages in 2026. Compare that with bank pricing right now — advertised 5-year fixed rates are sitting around 4.39% (nesto, mid-September 2026). Private lending is the expensive-but-sometimes-necessary option. Your exact number depends on your equity, the mortgage’s position, the property, and your exit plan. I am a mortgage broker in Richmond Hill, and here is how private mortgage rates in Ontario actually break down.
Why private mortgage rates are higher than bank rates
A private mortgage is funded by an individual investor, a mortgage investment corporation (MIC), or a private lending pool — not a bank. These lenders underwrite almost entirely on your property’s equity (the loan-to-value ratio), not on your income or credit score. That is exactly why private lending works for borrowers the banks turn down: self-employed borrowers with hard-to-document income, people mid-credit-repair, or anyone racing a deadline.
But that flexibility is priced in. Private lenders take higher-risk borrowers, lend on short terms (usually one year), and often allow interest-only payments. They also move fast — closings in 5–10 business days are normal, and rush files can fund in 24–48 hours. Speed and flexibility are what you are paying for, on top of the rate.
What private mortgage rates look like in Ontario right now
No single lender sets “the” private mortgage rate. Here are the ranges Ontario brokerages are publishing as of fall 2026:
| Position | Published rate range (2026) | Typical lender fee | Source |
|---|---|---|---|
| First mortgage | 7–12% | 2–5% | lendsimpl, FSRA-licensed Ontario brokerage, updated September 2026 |
| Second mortgage | 10–14% | 2–5% | lendsimpl, September 2026 |
| First mortgage | 5.99–9.99% | 1–2% | Effortless Mortgage, early 2026 |
| Second mortgage | 8.99–12.99% | 1–2% | Effortless Mortgage, early 2026 |
| First or second | 7.99–14.99% overall | 1–3% | Ratecore, 2026 |
Treat these as market ranges, not quotes — your file could land anywhere inside them depending on the factors below. That is also why getting two or three private quotes through a broker matters more than with bank mortgages: the spread between lenders is wide.
The 6 factors that move your private mortgage rate
1. Loan-to-value (LTV) — the biggest driver. Private lending is equity lending. Borrowing 60% of your home’s appraised value is a very different risk than borrowing 75%. Most private lenders cap out at 75–80% LTV on urban Ontario properties, and every extra point of equity you have tends to shave the rate.
2. Position. A second mortgage sits behind your existing first mortgage, so if anything goes wrong, the second lender is paid second. That is why second-position private rates run roughly 2–4 percentage points above first-position rates.
3. Property type and location. A well-maintained detached home in the GTA is easy collateral; a rural property, land, or a condo with issues is not. Lenders price the marketability of what they are lending against.
4. Term and payment structure. Most private mortgages run one year and are interest-only. Interest-only keeps your monthly payment lower — you are not paying down principal — but you need a plan for the principal at maturity.
5. Exit strategy. A lender who sees a credible path back to bank financing within a year (credit being repaired, income documentation improving, a sale closing) prices your file more kindly than one with no exit in sight. Have the plan before you sign.
6. Urgency. A standard 5–10 business day close is priced normally; a true 24–48 hour rush to stop a power of sale can cost more. Speed is a feature, and features have prices.
The true cost beyond the rate: fees and closing costs
The rate is only part of the bill. Budget for:
- Lender fee: typically 1–5% of the mortgage amount, often deducted from the advance rather than paid upfront. On a $300,000 advance with a 2% fee, $6,000 comes off the top before you see a dollar.
- Broker fee: charged by some brokerages on private deals (varies).
- Appraisal: roughly $300–$500 (Effortless Mortgage, 2026).
- Legal fees: roughly $1,000–$2,000 for the lawyer’s work, title search, and registration.
Always ask for the full in-hand number: how much actually lands in your account after every fee. That is the number that matters.
Private rates vs. bank rates this fall
The Bank of Canada held its policy rate at 2.25% on September 2, 2026 — the seventh consecutive hold since it cut to that level in October 2025. The Bank Rate sits at 2.50% and the deposit rate at 2.20%, with the next decision scheduled for October 28 (Bank of Canada). Headline inflation has been running around 3%, while core measures sit closer to 2%.
Fixed mortgage rates do not follow the Bank of Canada — they follow Government of Canada bond yields, which climbed through August, pulling advertised fixed rates higher — nesto listed a 5-year fixed at 4.39% and a 3-year fixed at 4.44% in mid-September 2026. So the gap you are paying to go private is measured against a moving target. If bank fixed rates keep drifting up, your exit refinance at maturity could land higher than you originally hoped — one more reason your exit strategy needs to be realistic, not optimistic.
How to get the best private mortgage rate you can
- Borrow less of your equity. If you can make the deal work at 65% LTV instead of 75%, do it — LTV is the lever that moves your rate most.
- Walk in with an exit plan. A one-page outline of how you return to bank financing within a year (timeline, milestones) genuinely helps your pricing.
- Compare multiple private lenders. The spread between private lenders is far wider than between banks. A broker who shops your file across many private lenders is doing the single most valuable thing in this process.
- Treat private as a bridge, not a destination. The one-year term forces the refinance conversation before the high rate does real damage.
When a private mortgage is still worth it
A private mortgage is expensive money, but it is often cheaper than the alternative. Rolling high-interest credit card balances into a second mortgage for debt consolidation can still save thousands in interest, even at private-mortgage pricing. Stopping a power of sale, buying time while self-employment income gets documented, or bridging between a purchase and a sale are all situations where the cost of private lending is smaller than the cost of doing nothing. Learn more about how the product works on my private mortgages page. Educational only — figures above are published market ranges, not quotes.
Talk to a broker before you sign
Do not take the first private quote you get — and do not sign anything without an exit plan. Contact me and I will shop your file across private lenders, walk you through the true all-in cost, and tell you honestly whether private lending is the right move or whether another route fits better.