If you're exploring private mortgage options in Ontario, the first question is usually: "What rate will I pay?" The honest answer is that it depends — private rates vary more widely than bank rates because each deal is individually assessed. But understanding what drives pricing helps you negotiate and set realistic expectations. Current Private Mortgage Rate Ranges As of early 2026, Ontario private mortgage rates generally fall into these ranges: Typical Rate Private first mortgage (urban, low LTV) 8%–10% 9% Private first mortgage (rural/higher LTV) 10%–12% 11% Private second mortgage (urban) 10%–13% 11.5% Private second mortgage (rural) 12%–15% 13% Construction/development 10%–14% 12% These rates are significantly higher than A-lender (4.5–6%) or B-lender (5.5–8%) options, which is why private mortgages should only be used when those options aren't available. What Determines Your Private Mortgage Rate Loan-to-Value Ratio LTV is the single biggest factor in private mortgage pricing: Rate Impact Under 50% Lowest rates (8–9%) 50–65% Mid-range (9–11%) 65–75% Higher (11–13%) 75–80% Highest (12–15%) The logic is simple: lower LTV means more equity cushion protecting the lender's investment. A $300,000 mortgage on a $600,000 property (50% LTV) is far less risky than $450,000 on the same property (75% LTV). Property Location Ontario is vast, and lenders price risk based on marketability: GTA core (Toronto, Mississauga, Brampton): Most competitive rates GTA suburbs (Vaughan, Markham, Oakville): Slightly higher Mid-size cities (Hamilton, Ottawa, KW): 0.5–1% premium Small towns and rural: 1–3% premium Northern Ontario: Highest rates, limited lender appetite Property Type Rate Premium Single-family detached Baseline Semi/townhouse +0–0.25% Condo (urban) +0.25–0.5% Multi-residential (2–4 units) +0.5–1% Commercial/mixed-use +1–3% Vacant land +2–4% (limited availability) Mortgage Position First mortgages get better rates than second mortgages because the first lender gets paid first in a power of sale. Borrower Situation While private lenders are equity-focused, your situation still matters: Clear exit strategy: Better rates Active bankruptcy (not discharged): Higher rates Repeat private borrower: May get loyalty pricing from MICs Strong broker relationship: Access to preferred lender rates The True Cost: Beyond the Interest Rate Private mortgage costs include several components beyond the stated rate: What Rate Would You Qualify For? Get a no-obligation private mortgage rate quote based on your property and situation. Get Your Rate Quote Fee Breakdown on a $200,000 Private Mortgage When Paid Lender fee (2%) $4,000 Deducted from advance Broker fee (1.5%) $3,000 Deducted from advance Legal — your lawyer $1,500 At closing Legal — lender's lawyer $1,200 At closing Appraisal $400 Before closing Title insurance $300 At closing Total upfront costs $10,400 Annual interest at 10% $20,000 Monthly payments 12-month total cost $30,400 This means the effective annual cost of a 1-year private mortgage is closer to 15% when you include the fees — not the 10% headline rate. How Fees Are Structured Lender fees: Charged by the lender for funding the mortgage. Typically 1–3% of loan amount. Usually deducted from the mortgage advance (you receive $194,000 on a $200,000 mortgage with a 3% lender fee) Broker fees: Your mortgage broker's compensation. Typically 1–2% on private deals (versus 0% to borrower on bank deals where the bank pays the broker) Legal fees: You pay your own lawyer plus the lender's lawyer. Budget $2,500–$3,500 combined How to Get the Best Private Mortgage Rate Work With an Experienced Broker Not all brokers have strong private lending relationships. An experienced broker: Has direct relationships with multiple private lenders and MICs Can present your file effectively to get competitive offers Knows which lenders suit your specific situation May have volume-based pricing advantages Improve Your LTV If possible, reduce the amount you need to borrow: Larger down payment on purchases Pay down existing mortgage before adding a second Consider whether you need the full amount Choose the Right Lender Type MICs often offer lower rates than individual investors (8–11%) Individual investors are faster and more flexible but typically charge more (10–15%) Syndicated lenders vary widely — compare carefully Learn about MIC advantages Negotiate Private lending is a negotiation. Your broker should: Present competing offers Highlight strengths of your file (low LTV, strong property) Push back on excessive fees Request open prepayment terms Private Rates vs B-Lender Rates: When to Choose Which Before committing to private rates, confirm you've exhausted B-lender options: Private Rate 5.5–8% 8–15% Fees 0–1% 2–5% Credit minimum ~550 None Income proof Flexible but required Minimal Speed 2–4 weeks 1–2 weeks Best for Credit or income issues with some documentation Equity-rich, speed-critical, or no other option If your credit is above 550 and you have some income documentation, explore B-lenders first — the cost savings are substantial. Full private vs B-lender comparison Ready to Get Started? Contact us today for personalized mortgage advice and competitive rates. Get Pre-Approved Call (416) 822-7357 Frequently Asked Questions What Rate Would You Qualify For? Get a no-obligation private mortgage rate quote based on your property and situation. Get Your Rate Quote Are private mortgage rates negotiable? Yes. Unlike bank rates, private rates are individually set. Your broker negotiates on your behalf, and factors like low LTV, strong property, and clear exit strategy give you leverage. Why are private mortgage rates so much higher than bank rates? Private lenders take on more risk (lower credit borrowers, non-standard properties) and use their own capital. The higher rate compensates for this risk and the smaller scale of their lending operations. Do private mortgage rates go down when the Bank of Canada cuts rates? Not directly. Private rates are more influenced by investor return expectations and risk appetite than by the Bank of Canada rate. However, sustained low rates can gradually reduce private lending rates as investors adjust expectations. Can I lock in a private mortgage rate? Most private mortgages are 1-year terms with rates set for the term. You won't get a 5-year rate lock like a bank mortgage. At renewal, the rate may change based on market conditions. What's the lowest private mortgage rate available in Ontario? As of 2026, competitive MIC lenders offer first mortgage rates starting around 8% for very low LTV (under 50%) urban properties. Most borrowers should expect 9–12%. Back to complete Ontario private mortgage guide Compare Private Mortgage Rates Speak with a broker who has direct relationships with Ontario's top private lenders and MICs. Request Rate Comparison
