When traditional banks refuse, private lenders often agree. For many homeowners across Canada, especially those who need money quickly or don’t meet strict bank requirements, private second mortgages have become a useful option. These lenders look at home equity instead of credit scores, making them a good choice for borrowers with tight deadlines, financial difficulties, or special situations.
In this guide, we outline the top private mortgage lenders in Canada, explain how second mortgages work, and show why companies like Bank Street Mortgage and Best Mortgage Online in Canada are becoming reliable alternatives for non bank financing.
What Is a Private Second Mortgage in Canada?
A private second mortgage, also called an equity based second mortgage, is a loan placed behind your existing mortgage. Unlike traditional lenders that focus on income, employment, or credit history, private lenders mainly consider your home equity, the property value, and the loan to value (LTV). This approach makes private second mortgages a popular choice for people with poor credit, irregular income, high debt, self‑employment challenges, or urgent cash needs. These mortgages are typically offered by private mortgage lenders, MIC mortgage companies (Mortgage Investment Corporations), alternative lending firms, and hard money lenders.
Top Private Mortgage Lenders in Canada for Second Mortgages
Here are the leading options for private second mortgages, including recognized MICs, alternative lenders, and trusted companies offering bridge financing, high rate second mortgages, and equity loans.
1. Bank Street Mortgage (Ontario’s Trusted Private Lender)
Bank Street Mortgage is a reliable source for second mortgages, equity based loans, bridge financing, and non bank home financing in Ontario. Approvals are based on equity, not credit, with fast underwriting and simple documentation. They work with homebuyers, investors, and homeowners in financial recovery, offering flexible terms for high equity clients. The company partners with mortgage brokers, underwriters, and MIC investors to deliver custom private lending solutions.
2. Best Mortgage Online in Canada
This platform connects borrowers with MIC mortgage companies, hard money mortgage lenders, and private second mortgagCanada specialists. It helps people compare lenders offering non prime mortgage solutions, high LTV second mortgages, and short term bridge financing. Borrowers can scan multiple private lenders at once for more control and better pricing.
3. MIC Mortgage Companies Across Canada
MICs (Mortgage Investment Corporations) provide competitive private lending programs such as equity financing, second charge mortgages, and high rate second mortgage options for riskier files. They are ideal for self employed borrowers, clients with bruised credit, and investors needing quick access to equity.
4. Hard Money Mortgage Lenders (Fast but Higher Rates)
Hard money lenders focus on property value, offering same day approvals, quick bridge loans, renovation financing, and second position mortgages. They are suitable for emergency cash needs or real estate projects where timing is critical.
5. Alternative Mortgage Lenders in Canada
These lenders operate between banks and private lenders, offering non-bank home financing, flexible documentation, and options for clients recovering from bankruptcy or consumer proposals. Their rates are lower than hard money lenders but higher than banks, making them ideal for mid risk borrowers.
Who Should Consider a Private Second Mortgage?
A private second mortgage is the best fit for people who need funds for:
Debt consolidation
It helps combine multiple debts into one manageable loan, lowering overall interest costs. By reducing high‑interest credit card or loan balances, borrowers can simplify payments and regain financial stability.
Home Renovation or Repair A private second mortgage can fund upgrades or repairs, boosting property value before refinancing or selling.
Emergency Expenses It provides quick cash for urgent needs like medical bills, legal fees, or school costs when savings fall short.
Business or Self‑Employment Funding Home equity can be used as working capital, helping entrepreneurs and self‑employed individuals manage or grow their business.
Paying CRA Tax Debt Private lenders often approve loans for tax obligations, even when traditional banks decline applications.
Bridge Financing This option offers short‑term funds to cover expenses until you sell your home or close on a new property.
How Do Mortgage Brokers and Underwriters Fit In?
Mortgage brokers and underwriters play an important role in securing a private second mortgage. Brokers act as the link between borrowers and lenders, helping match you with the right option based on your financial situation. Underwriters then carefully review the details of your application to ensure the loan is structured properly and the risks are manageable. Together, they make the process smoother and more reliable.
- Mortgage brokers help match you with the right private lender based on:
- Equity
- Property value
- Risk level
- Loan purpose
- Interest rate preference
- Underwriters assess:
- LTV ratios
- Property condition
- Borrower risk
- Repayment ability
By working together, brokers and underwriters ensure your private second mortgage is approved efficiently and tailored to your needs.
Pros and Cons of Private Second Mortgages
| Advantages | Disadvantages | |
| Fast approval | Higher interest rates (high rate second mortgage) | |
| No income verification | Shorter repayment periods | |
| Works with bad credit | Fees for setup and legal work | |
| Flexible terms | ||
| Short term financing solutions |
How Much Do Private Second Mortgages Cost?
Rates for private and hard money loans vary depending on several factors, including equity, loan‑to‑value (LTV), lender type, and property location (Ontario, BC, Alberta, and other provinces).
Key Factors Influencing Rates
- Equity – the amount of ownership in the property
- LTV (Loan‑to‑Value) – ratio of loan size to property value
- Lender Type – private vs. institutional lenders
- Location – regional differences such as Ontario, BC, Alberta, etc.
Typical Costs
- Interest – estimated between 8% and 15%
- Fees – estimated between 3% and 5%
- Term – typically 1 to 2 years
Hard money lenders may charge slightly higher rates because they provide quicker access to funds and more flexible approval criteria.
Is Ontario a Good Place for Private Lending?
Yes. Ontario is one of the strongest markets for private lending. Homeowners here hold significant equity, property values remain high, and there is an active network of private lenders and mortgage investment corporations (MICs).
High Home Equity Ontario homeowners usually have strong equity in their properties, giving lenders solid collateral and borrowers more flexibility.
Strong Real Estate Values Property values in Ontario continue to support lending activity, especially in major cities where demand remains high.
Active Private Lending Market Many borrowers who cannot qualify under strict bank rules turn to private lenders, creating a competitive and growing market.
Many MIC Mortgage Companies Mortgage Investment Corporations (MICs) are common in Ontario, pooling investor funds to finance mortgages and strengthen the lending ecosystem.
Regional Hotspots Cities such as Toronto, Ottawa, Mississauga, and Brampton have become major hubs for non‑bank financing, driven by high property values and diverse borrower needs.
Why Homeowners Choose Private Lenders Over Banks
Traditional banks in Canada use strict income rules, credit score requirements, and mortgage stress tests. If a borrower doesn’t meet these conditions, the bank usually declines the application even if the homeowner has strong equity.
Private lenders, on the other hand, focus mainly on the value of the property rather than the borrower’s financial history. This makes the approval process much faster and more flexible.
- Easier qualification compared to strict bank requirements
- Faster access to funds, often within 24–48 hours
- Financing options that banks typically do not offer
- Customized repayment plans tailored to borrower needs
- Solutions available for non‑prime borrowers
- Growing popularity across the Canadian mortgage market due to flexibility and speed
Conclusion
Private mortgage lenders in Canada are a lifeline for homeowners who don’t fit the strict requirements of traditional banks. Whether you’re looking for equity based second mortgages, bridge financing, or non prime mortgage solutions, companies like Bank Street Mortgage and Best Mortgage Online in Canada offer flexible, fast, and reliable financing options.
If you need quick access to home equity without the stress of bank approvals, a private second mortgage may be the right solution for you.
FAQs
1. What is a private second mortgage?
It’s an equity based loan taken behind your first mortgage, offered by private lenders instead of banks.
2. Do I need good credit to qualify?
No. Private lenders focus mainly on home equity, not credit scores.
3. How fast can I get approved?
Many private lenders offer same day or 48 hour approvals.
4. What is a MIC mortgage company?
A MIC (Mortgage Investment Corporation) is an investment fund that provides private mortgages to homeowners.
5. What is bridge financing?
Short term financing used when buying a new property before selling your current one.
6. Are private mortgage rates high?
Yes, they are higher than bank rates, but they offer flexibility for borrowers who don’t meet bank criteria.
7. Can I get a private mortgage in Ontario?
Yes Ontario is one of the biggest private lending markets, with many lenders specializing in second mortgages.