When private can make sense
Private lending may fit urgent refinance needs, tax arrears, bruised credit, estate or separation situations, construction complexity, or a temporary gap before bank or B-lender financing is realistic.
Short-term bridge lending
Specialty lendingPrivate mortgages should have a clear exit plan.
Private mortgages can help when timing, credit, income, or property issues do not fit institutional lending. They are usually more expensive and should be reviewed as bridge financing with a defined exit.
When private does not make sense
A private mortgage is rarely the right tool just to chase a lower advertised rate. Fees, interest, legal costs, and renewal risk can outweigh the benefit if there is no clear strategy.
Exit strategy is not optional
Before signing, compare how the mortgage will be paid out: sale, refinance, improved credit, filed taxes, lower debts, completed construction, or a return to institutional lending.
Source-backed answers
Private mortgage suitability and exit planning
Private lending should be reviewed as a short-term bridge with clear cost, risk, and repayment logic.
When should private lending be considered?
Private lending should normally be considered after the decline reason is understood and bank, credit union, monoline, or alternative lender options have been reviewed. FSRA emphasizes that private mortgage terms, costs, risks, and suitability should be clearly explained. A private mortgage may help with timing, credit repair, tax arrears, or property issues, but it should come with a documented exit plan.
FSRA private mortgage guidanceWhy is the exit strategy the main test?
Private mortgages often have higher rates, fees, and shorter terms than institutional lending. The key question is not only whether the file can be approved today, but how the mortgage will be paid out or replaced before renewal risk becomes expensive. Exit options may include sale, refinance, credit repair, completed tax filings, lower debt, completed construction, or a return to a bank or B-lender path.
FSRA private mortgage guidanceQuestions
Common questions
Are private mortgages expensive?
They can be. Interest, lender fees, broker fees, and legal costs should be reviewed together before deciding.
How long should a private mortgage last?
Usually as short as practical. The right term depends on the exit strategy and the reason private lending is needed.
Next step
Here is how the review works
This is a short intake, not a full mortgage application. Share enough to identify the likely next step.
- Share the file.Income, credit, property, equity or down payment, documents, and timing.
- Map the lender lane.Prime if possible, B-lender if needed, private only when it makes sense as a bridge.
- Decide next steps.You get a practical path before committing to an application.
If your renewal, mortgage term, or rate lock is approaching, reviewing the options early gives you more room to choose.