A private mortgage Toronto option for borrowers turned down by banks. You’re not out of options — as a licensed Ontario mortgage broker based in Richmond Hill, I connect Toronto homeowners and buyers with reputable private lenders: approvals based on your home equity, closings in days, and every cost disclosed up front.
TL;DR: A private mortgage in Toronto is funded by a private lender, not a bank — approval is based on your home equity (up to 75–80% of appraised value) and a clear exit strategy, not your credit score. Typical rates: 1st mortgages 7%–12%, 2nd mortgages 10%–14% (updated September 2026). Most deals close in days with 1-year terms, and condos, freeholds, and multi-unit homes across Toronto all qualify.
Last updated: September 2026
Why Do Toronto Borrowers Use Private Mortgages?
Many of my Toronto clients come to me after being declined by a bank, when they’re self-employed with hard-to-document income, when bruised credit blocks traditional approval, or when a closing is urgent and there’s no time for a bank’s 2–6 week timeline. Others use a private mortgage to access equity without giving up a low existing first-mortgage rate.
How Much Can You Borrow? Toronto Equity Math
Most private lenders go to 75–80% of appraised value. Example: your Toronto home appraises at $1,000,000 and you owe $550,000. At 75% loan-to-value, the maximum total borrowing is $750,000 — so you could access up to $200,000 as a second mortgage without touching your first.
What Are Private Mortgage Rates In Toronto?
Typical rates I see across my lender network (updated October 2026): 1st private mortgages 7%–12%, 2nd private mortgages 10%–14%, plus lender fees of 1%–3% of the loan amount. Your exact rate depends on loan-to-value, property type, and term.
Ranges reflect typical advertised private-lender pricing in Ontario as of September 2026. Actual rates vary by file.
Which Areas Of Toronto Do You Serve?
Downtown Toronto condos, North York, Scarborough, Etobicoke, East York and York — most residential property types qualify, including condos, freeholds, and multi-unit homes.
How the Process Works
- Free consultation — your situation, property, and goals.
- Application — basic property and financial details.
- Lender matching — best terms presented, often within 24–48 hours.
- Funding — a real estate lawyer registers the mortgage and funds are released, often within days.
Private Mortgage Toronto FAQs
How fast can a private mortgage close in Toronto?
Often within a week. Once your application and appraisal are in, approvals typically come in 24–48 hours and funding follows in days — far faster than a bank’s 2–6 weeks.
Can I get a private mortgage in Toronto with bad credit?
Yes. Private lenders decide mainly on your home equity and exit strategy, so past bankruptcies, consumer proposals, or missed payments don’t automatically disqualify you.
Do Toronto condos qualify for private mortgages?
In most cases, yes — resale condos in established Toronto buildings are widely accepted by private lenders. Very small units or buildings with issues may face restrictions.
What does a private mortgage cost in Toronto?
Expect interest rates of roughly 6–15% depending on whether it’s a first or second mortgage, plus a lender fee of 1–3% of the loan amount, an appraisal ($300–$500), and legal fees. Every cost is disclosed in writing before you commit.
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Exit Strategy: Leaving Your Private Mortgage Toronto Loan Behind
Most private mortgage Toronto loans run for a one-year term, giving you time to repair credit, document income, or sell — then refinance into a lower-rate bank or credit-union mortgage. Before you sign, ask your broker to map out a realistic exit plan with timelines. As a licensed Ontario mortgage broker regulated by the Financial Services Regulatory Authority of Ontario (FSRA, licence #13380), I build that exit strategy into every private mortgage Toronto file I arrange, so the higher short-term rate becomes a stepping stone, not a trap.
Watch the fine print: prepayment terms, renewal fees, and discharge fees vary by lender. A good private mortgage Toronto broker discloses every fee in writing before you commit — if a lender won’t put costs on paper, walk away. Keep your end goal in sight: the cheapest private mortgage is the one you exit on schedule.
Timing matters too. Start your refinance application 60 to 90 days before your private mortgage Toronto term ends, so your bank approval is ready and you avoid renewal fees or a forced extension at higher rates.