A private mortgage is financing provided by a private individual, mortgage investment corporation (MIC), or private lending company rather than a traditional bank or credit union. Private lenders may place greater emphasis on the property, available equity and overall transaction than traditional lenders do.

Possibly. Private lenders can have different qualification criteria from banks and may place more emphasis on the property's value and equity.

However, approval isn't guaranteed. Your property, LTV, existing debt, loan purpose, ability to make payments and overall exit strategy can all matter.

Private mortgages typically cost more than traditional mortgages. Depending on the transaction, costs can include interest, lender fees, broker fees, legal fees, appraisal costs and other transaction-specific charges.

The important number isn't just the interest rate — you should understand the total cost of borrowing and all applicable fees before committing.

Private mortgages are generally intended as short-term financing, often around one or two years, although the actual term depends on the lender and transaction.

Before taking one, you should have a realistic exit strategy — such as refinancing into a traditional mortgage, selling the property, or resolving the issue that prevented traditional financing.

Not always. Some private mortgages may be structured with interest-only payments, while others may have different repayment structures.

It's important to understand exactly what your payment covers. With an interest-only mortgage, for example, your payments may cover the interest without reducing the principal balance.

This is one of the most important questions to answer before taking the mortgage.

Your exit strategy should be realistic from the beginning. If you plan to refinance into a traditional mortgage, you should understand what needs to change for that to become possible.

If you cannot refinance, sell, or otherwise repay the mortgage when required, you could face renewal costs, additional fees or enforcement action depending on the mortgage agreement and circumstances.

Don't look at the interest rate alone.

Before signing, understand:

Mortgage amount · Interest rate · Term · Payment structure · Lender fees · Broker fees · Legal costs · Prepayment terms · Default provisions · Renewal terms · Exit strategy

Your mortgage professional should explain the material risks and costs clearly. In Ontario, licensed mortgage professionals are required to provide certain disclosures, including material risks and costs, and borrowers generally have at least two business days to review required mortgage disclosure before signing unless they choose to waive that period.