Private Mortgage Rates in Ontario:2026 Live Pricing Guide

A private mortgage rate is not set by a rate sheet the way an A-lender rate is. It is set by the cost of the money behind it plus the lender's assessment of how likely they are to be repaid on time. Individual lenders and small syndicates are typically funding from cash that would otherwise earn 3%–4%, so they need a spread to justify the risk and the illiquidity. Mortgage investment corporations are pooling investor money that has been promised a target return — usually 7%–9% net to the investor — so the mortgage has to be written above that number after management fees and expected losses.

That structure explains behaviour that looks arbitrary from the outside. It is why a lender will happily write a $200,000 second at 9.99% but decline a $60,000 second at any rate — the fixed cost of underwriting, legals and administration does not shrink with the loan size. It is why 12-month terms are common and 5-year private terms basically do not exist: capital that recycles annually can be repriced. And it is why the lender fee is non-negotiable on small files but often negotiable on larger, cleaner ones.

It also explains the single biggest lever you control. Lenders price uncertainty, and the most expensive uncertainty on a private file is "what happens at maturity." A file that arrives with a current appraisal, clean title, taxes paid, and a written, credible exit — two years of filed returns landing in April, a firm sale, a B-lender pre-approval subject to seasoning — reads as a 12-month cash flow with a defined end. A file that arrives without one reads as a potential foreclosure, and gets priced accordingly.

Borrowers almost always choose the lower rate, and that is frequently the more expensive mortgage. Take a $300,000 first mortgage over a 12-month term. Quote A is 9.49% with a 3% lender fee and a 1% broker fee. Quote B is 10.49% with a 1% lender fee and a 1% broker fee. Quote A costs $28,470 in interest plus $12,000 in fees, or $40,470. Quote B costs $31,470 in interest plus $6,000 in fees, or $37,470. The higher rate is $3,000 cheaper, and it is cheaper by more if you pay it out early.

Three other terms change the total as much as the rate does. First, prepayment: some private lenders charge a three-month interest penalty on early payout, which quietly adds 2%–3% to the cost of a file you intend to refinance in month seven. Second, renewal: a lender who charges a 1% renewal fee has effectively priced a 24-month deal, not a 12-month one, if your exit slips. Third, whether interest is paid monthly or prepaid and held back from the advance — a holdback reduces the money you actually receive without reducing what you owe.

Ask for one number on every quote: the total cost of borrowing over the term, in dollars, including all fees and any interest holdback. Under Ontario's mortgage brokerage rules the Form 1.1 disclosure you sign has to show the cost of borrowing before you commit, so if a quote and its Form 1.1 do not agree, that is the conversation to have before funding — not after.

Private pricing does not track the Bank of Canada overnight rate closely, but it does not ignore it either. With the overnight rate at 2.25% and prime at 4.45%, the alternative yield available to private capital is lower than it was through the tightening cycle, which has compressed private firsts modestly at low loan-to-values. What has not compressed is pricing above 75% loan-to-value, or on rural and special-purpose property, because those files are priced on liquidation risk rather than on yield.

The second force is the renewal wave. As institutional renewals push some borrowers into stress-test failures and B-lender queues lengthen, demand for short-term private bridging rises — and demand supports fees more than it supports rates. Expect lender fees to stay firm at the 1%–3% range even where rates drift down. The third force is appraisal conservatism: valuations in softer submarkets are being written cautiously, which reduces the loan a given property supports and pushes some borrowers into a higher loan-to-value band than they expected.