Navigating the private lending landscape in Ontario can feel overwhelming, especially if traditional banks decline your mortgage application. A licensed mortgage broker can be your ideal guide, streamlining the search for a private lender and ensuring your financial needs are met responsibly.

Why Consider a Private Mortgage?

Private lenders—individuals or small firms—offer loans outside the usual bank system. They're often the lender of last resort for:

• Self-employed individuals with variable incomes
• Borrowers rebuilding credit or with bad credit
• Those needing fast or flexible financing

In Ontario, the private mortgage market is growing: 16.8 % of mortgages in 2023 came from private lenders (up from 13.5 % in 2022), a trend driven largely by homeowners with constrained bank options.

The Role of an Ontario Mortgage Broker

Mortgage brokers and Level 2 mortgage agents in Ontario are licensed under the Mortgage Brokerages, Lenders and Administrators Act (MBLAA), overseen by the Financial Services Regulatory Authority of Ontario (FSRA). Only Level 2 agents or brokers can introduce private mortgage lenders (privatelenderassociation.ca, FSRA, mortgagebrokerstore.com).

Broker Obligations Under FSRA

• Know Your Client/Product – Brokers assess your financial situation and understand each lender’s terms and risks (FSRA).
• Suitability Assessment – Ontario’s FSRA mandates brokers recommend only mortgages that match your needs, with a written rationale (sondhidefence.ca, FSRA, Mortgage Rates Canada).
• Transparent Fees & Terms – Brokers must fully disclose all costs—interest, brokerage, legal, renewal—so your APR is accurate (privatelenderassociation.ca).

How the Process Works

Initial Consultation

Your broker reviews finances, credit, goals, and timelines (e.g., plans to refinance or sell).

Lender Short-Listing

They select private lenders whose programs match your needs, considering rates, loan-to-value limits, and repayment terms.

Suitability Evaluation

Brokers compare private versus alternative options, explaining why private lending is the best or only suitable option.

Full Disclosure

You’ll receive a written commitment with APR breakdown and potential fees, including penalties for missed payments or prepayments.

Exit Strategy Planning

Responsible brokers ensure you have an exit plan—such as qualifying for traditional financing or selling/refinancing before the term ends.

Legal Closing

A lawyer finalizes the mortgage; transaction forms protect both borrower and lender.

Tips for Homeowners

• Always verify your broker and lender’s FSRA licence status.
• Compare multiple private mortgage offers—not just with your broker, but also by consulting FSRA’s registry.
• Ask for a clear repayment plan before signing.
• Understand all costs baked into the APR—including broker and legal fees.

What You Should Do

A mortgage broker is your trusted expert in Ontario’s private lending space. They ensure you get access to legitimate lenders, transparent terms, and responsible advice aligned with your financial goals. With proper planning and FSRA-regulated guidance, private mortgages can be a smart bridge to traditional financing or your next property milestone.

‍Apply Now To Get Started.