Private Mortgage Rates in Ontario: What You Can Expect
When homeowners begin exploring a private mortgage, one of the first questions they ask is:
“What are private mortgage rates in Ontario?”
The honest answer is that there is no single rate.
Unlike banks, private mortgage lenders evaluate every application individually. Your property’s equity, loan amount, exit strategy, and overall risk all influence the interest rate you receive.
At Mike Cara Mortgage Broker, we work with a wide network of private lenders across Ontario to help clients secure competitive financing solutions based on their unique circumstances—not simply their credit score.
What Are Private Mortgage Rates in Ontario?
Private mortgage rates are generally higher than traditional bank mortgage rates because private lenders assume more risk and often approve borrowers who may not qualify through conventional financing.
As of 2026, many Ontario private mortgage rates generally fall within these ranges:
| Mortgage Type | Typical Rate Range |
|---|---|
| First Private Mortgage | Approximately 6.5%–9% |
| Second Private Mortgage | Approximately 8%–13% |
| Higher-Risk Private Loans | 10%+ depending on risk |
These ranges vary based on market conditions, property type, loan-to-value ratio, and the borrower’s overall profile. (WOWA)
What Determines Your Private Mortgage Rate?
Every private mortgage is priced individually.
The biggest factors include:
1. Loan-to-Value (LTV)
The more equity you have in your home, the lower your risk to the lender.
Borrowers with:
- 50% equity often receives better pricing
- 65% equity remains very attractive
- 75% equity may pay higher rates
Equity is one of the most important pricing factors.
2. Property Location
Properties located in:
- Peterborough
- Lindsay
- Kawartha Lakes
- Durham Region
- Ottawa
- GTA
often receive stronger lender interest than remote or difficult-to-sell rural properties.
3. Mortgage Position
- First mortgages generally receive lower rates.
- Second mortgage carries more risk and therefore usually costs more.
4. Credit History
Private lenders place less emphasis on credit scores than banks.
However, borrowers with stronger credit often receive:
- lower rates
- lower lender fees
- more lender options
5. Exit Strategy
One of the biggest considerations is:
How will you repay the mortgage?
Examples include:
- refinancing with an A lender
- refinancing with a B lender
- selling the property
- improving income documentation
- resolving tax arrears
- completing renovations
A clear exit strategy often leads to better pricing.
Private Mortgage Fees
Interest rates are only one part of the total borrowing cost.
Private mortgages commonly include:
- Lender fees
- Broker fees
- Legal fees
- Appraisal costs
- Title insurance
- Registration costs
This is why comparing only the advertised interest rate can be misleading. The total cost of borrowing—including fees—should always be reviewed before accepting an offer. (WOWA)
Why Are Private Mortgage Rates Higher?
Private lenders provide financing that banks may decline.
They frequently assist borrowers who are:
- Self-employed
- Recovering from credit issues
- Facing mortgage renewals
- Consolidating debt
- Managing CRA tax debt
- Preventing power of sale
- Requiring fast closings
Higher rates compensate lenders for the increased risk and the flexibility they provide.
Can You Negotiate a Private Mortgage Rate?
Yes.
An experienced mortgage broker can often negotiate:
- lower interest rates
- reduced lender fees
- improved repayment terms
- better renewal options
Because Mike Cara works with multiple private lenders rather than a single source of funding, clients gain access to competitive options tailored to their individual circumstances.
How to Get the Best Private Mortgage Rate
You can improve your pricing by:
- Increasing your home equity
- Reducing your overall borrowing
- Providing accurate income documentation
- Demonstrating a realistic exit strategy
- Working with an experienced mortgage broker
- Comparing multiple lenders instead of accepting the first offer
Preparation often results in a stronger application and more competitive terms.
Why Choose Mike Cara?
With more than 30 years of experience in finance, Mike Cara understands how private lenders assess risk and structure mortgage solutions.
As a licensed Mortgage Broker with TMG The Mortgage Group, Mike has access to a broad network of private lenders throughout Ontario and helps clients find financing that aligns with their short- and long-term goals.
Whether you need financing due to self-employment, bruised credit, debt consolidation, or an urgent closing, Mike works to secure the most suitable private mortgage.
Frequently Asked Questions
Are private mortgage rates fixed?
Most private mortgages have fixed interest rates for the duration of the term, which is commonly 6 to 24 months.
Do private mortgage rates follow the Bank of Canada?
Not directly. Private mortgage pricing is driven primarily by lender risk, available investor capital, property equity, and market demand rather than the Bank of Canada’s overnight rate. (WOWA)
Can I refinance out of a private mortgage?
Yes. Most private mortgages are designed as short-term financing until you qualify for a traditional mortgage or sell the property.
Is the lowest interest rate always the best option?
Not necessarily. The overall cost—including lender fees, broker fees, legal costs, and repayment flexibility—should be considered when comparing offers.
Related Resources
Continue learning about private lending:
- Private Mortgage Lender in Peterborough (Pillar Page)
- Who Qualifies for a Private Mortgage?
- Private Mortgage vs Bank Mortgage
- Private Mortgage Fees Explained
- Second Mortgages in Ontario
- Debt Consolidation Using a Private Mortgage
Ready to Explore Your Options?
If you’re wondering what private mortgage rate you may qualify for, contact Mike Cara, Mortgage Broker, for a confidential assessment. Every application is unique, and with access to multiple private lenders across Ontario, Mike can help you compare options and find a solution that fits your financial goals.
