Animated explainer · 1:50
Private Mortgages Explained: How Private Lending Works in Ontario
Who private lenders are, how they price a loan, and the three questions that decide whether a private mortgage is safe for you.
Watch: Private mortgages in 1:50
Straight from our broker
“A private mortgage is short-term financing secured by your home, used when a bank says no.”
The short version
- A private mortgage is secured by your property and underwritten mainly on equity and marketability, not your credit score.
- Loan-to-value drives the approval — most Ontario private lenders cap around 75% in urban markets and lower in rural ones.
- Compare offers on total cost of borrowing (rate plus lender, broker, legal and appraisal fees) divided by the months you need the money.
- Confirm the exit before you sign, including renewal cost if the exit slips.
Full video script, scene by scene
Narration, on-screen text and animation direction exactly as produced.
Scene 1 · 0:00–0:10
Cold open: the decline letter
Narration: A bank decline is not a verdict on you. It usually means your file did not fit one specific set of rules on one specific day.
On screen: Declined by the bank ≠ unfinanceable
Animation: A single envelope drops onto a kitchen table and unfolds into a short letter. The word DECLINED stamps across it in burgundy, then the letter folds itself into a small paper house.
Scene 2 · 0:10–0:28
What a private mortgage actually is
Narration: A private mortgage is a loan secured against your property by an individual, a group of investors, or a mortgage investment corporation, instead of a chartered bank. Banks lend mostly on your income and credit score. Private lenders lend mostly on the property: what it is worth, where it is, and how much equity sits behind their loan.
On screen: Banks lend on you. Private lenders lend on the property.
Animation: Split screen: on the left a tall bank tower with a rigid checklist; on the right a smaller building labelled Private Lender holding a magnifying glass over a house.
Scene 3 · 0:28–0:46
Loan-to-value is the whole conversation
Narration: The number that drives every private approval is loan-to-value. Add your existing mortgage to the new loan, divide by the value of the property, and you have it. Most Ontario private lenders stop somewhere around seventy-five percent in a city and lower in a rural area, because the equity above their loan is their protection if things go wrong.
On screen: Loan-to-value = all mortgages ÷ property value
Animation: A house fills with liquid to show equity. A dotted line rises to 75% and stops, with the space above shaded and labelled Lender's cushion.
Scene 4 · 0:46–1:08
The real price: total cost of borrowing
Narration: Here is where people get hurt. Judge a private mortgage on its total cost of borrowing, not the interest rate. Alongside the rate there is a lender fee, a broker fee, your own legal fees, the lender's legal fees, and an appraisal. Add all of it to the interest you will pay over the term, then divide by the number of months you actually need the money. That monthly number is the real price, and it is the only fair way to compare two offers.
On screen: Rate + fees + legals ÷ months you need it
Animation: A price tag reading only the interest rate is pulled away to reveal five stacked cards: lender fee, broker fee, your legal fees, lender's legal fees, appraisal. They stack into a single column.
Scene 5 · 1:08–1:30
The exit plan
Narration: Almost every private mortgage is a short-term, interest-only bridge — usually twelve to twenty-four months. So the most important question is not what it costs, it is how it ends. What happens at maturity? Are you refinancing back to a bank, selling, or finishing a project? And if that takes longer than planned, will the lender renew, what does the renewal cost, and is that cost paid up front or added to the loan? If you and your broker cannot answer that clearly, stop and rebuild the plan.
On screen: Three questions: total cost, exit, and what if the exit slips?
Animation: A calendar animates twelve months forward. Two doors appear at month twelve, labelled Refinance and Sell. A third faded door labelled Renew sits behind them with a price tag.
Scene 6 · 1:30–1:50
Close
Narration: Used properly, a private mortgage buys you time to fix something: a renewal that fell through, arrears, a tax bill, a business cycle, or a purchase that closes before a sale. Used badly, it just delays a problem at a higher price. Start with the exit, price the whole thing honestly, and then decide.
On screen: Plan the exit first. The Juneja Group — FSRA #10874
Animation: The paper house unfolds back into a clean plan on the table, with a burgundy stamp reading Plan, not panic. Logo and licensing lock-up.
Questions people ask about private mortgages
Educational information only — subject to approval
This website provides general educational information only and does not constitute financial, mortgage, legal, or tax advice. All rates, products, scenarios, and calculator results are illustrative and subject to lender approval, credit qualification, property valuation, and current market conditions. Mortgages are arranged by Saminder Juneja, Mortgage Broker — Mortgage Centre Canada / Get A Better Mortgage Inc. (FSRA #10874). Nothing on this site constitutes an offer to lend.