Who Are Private Mortgage Lenders?

Private Mortgages and Private Mortgage Lenders often have a negative reputation, especially in the media.  Unfortunately, these types of loans are often inaccurately reported on.

The reason they get such a bad rap is because they are expensive when compared to your traditional bank mortgage.  The interest rates are higher and fees are involved more times than not.

Here are some detailed examples of the costs.

We need to remember, however, that Private Mortgages are used for special situations.  They are not intended to be used by everyone.  

You may require short term private financing if you have been declined by the banks or if you need quick access to funds.  Because Private Lenders are not federally regulated, they are not obligated to follow the same guidelines as Canadian chartered banks and some federal credit unions.  This means they are more flexible and willing to take on more risk.

When you may need or want to consider a Home Equity Loan or Private Mortgage.

Private Mortgage lenders fill a very important void when you need help but can’t access your home equity because the bank says “no”.  

In exchange for their relaxed guidelines and tolerance for higher liability borrowers, they need to offset their exposure and protect their investment by setting interest rates and fees based on risk.

Please read our article on How Home Equity Loans / Private Mortgages Work for more detailed information. 

Who Are Private Mortgage Lenders?

Now that we have covered a little on private mortgages themselves, let’s talk about who offers such mortgages.

There are three different sources from which Private Mortgages or Home Equity Loans are funded.




Mortgage Investment Corporation: a MIC is a group of investors who pool their funds together and lend out money to numerous applicants at once, assuming they meet the predetermined lending guidelines. 


Syndicate: a group of individuals who put their money together and lend on a case by case basis or deal by deal basis.

Individual: a person who lends their money and sets their own lending guidelines and pricing.  


By far, Mortgage Investment Corporations are the most popular source for private mortgage money. They are professional corporations with highly experienced fund managers and lenders.  Their number one priority is to protect their investors which means they qualify homeowners in a responsible manner. The last thing they want is for a new customer to miss a mortgage payment. 

GOAT Mortgages works with various Mortgage Investment Corporations in British Columbia, Alberta, and Ontario, to find safe and viable solutions.

Before applying for a Home Equity Loan or Private Mortgage, consider these 4 alternatives

Please contact us with any questions or for any clarification on this article.