Treadstone Associates
Courses/ Private Mortgage Underwriting &
Start here · 12 min

Private lending is a different business, not just a higher rate

Key takeaways
  • ●Private lending qualifies the property and the exit first; the borrower's income is often secondary to whether the deal itself makes sense.
  • ●Private mortgages sit outside OSFI's guidelines entirely, which is what makes them flexible — and exactly why the broker's own diligence matters more, not less.
  • ●Every private mortgage in this course must respect Canada's criminal interest rate — that's covered in its own module because it's the one line that never moves.

A third tier with its own logic

The flagship course opens with the idea that Canadian residential lending splits into three tiers — A, B, and private — each pricing risk differently, with none of them simply "wrong" when they disagree. This course goes deep on the third tier: what equity-driven lending actually means in practice, and how to underwrite it responsibly.

What 'equity-driven' really changes

The underwriting question shifts from "can this person repay from income" to "does this property's equity and marketability support recovery if they don't" — without dismissing income and the borrower's story entirely. Module 01 unpacks exactly what that shift means and where the line actually sits.

No OSFI, no insurer — more discretion, more responsibility

Private lenders, and the brokers who arrange their mortgages, operate outside OSFI's Guideline B-20 and outside insurer rules entirely. That absence of a regulatory ceiling is exactly why the disclosure duties covered in Module 04 and a broker's own diligence carry more weight here than in A or B lending — there's no insurer or OSFI floor quietly catching a sloppy file.

The line that never moves: the criminal rate of interest

Unlike lender guidelines, which vary by institution and change over time, the criminal rate of interest is a federal Criminal Code limit that applies regardless of what any lender or broker prefers. It gets its own full module (05) because getting it wrong isn't a declined file — it's a criminal offence.

How this course is built

Eight modules: equity-driven lending, first vs second position, loan-to-value discipline, fees and disclosure across three provinces, the criminal interest rate, term and marketability, and finally building a credible exit before you fund. Work through them in order — later modules assume the vocabulary from earlier ones.

Knowledge checkUnanswered

What is the central difference between how a private lender underwrites a deal and how an A or B lender does?

APrivate lenders ignore the property entirely and focus only on income.
BPrivate lenders primarily assess the property's equity and marketability, treating the ability to recover funds from the property as central rather than secondary.
CPrivate lenders are required to use the same OSFI stress test as A lenders.
DThere is no meaningful difference — all three tiers underwrite identically.

Equity-driven underwriting is the defining feature of the private tier — the property and its saleability carry the underwriting weight that income and credit carry at A and B. The "ignore income entirely" option overstates it; income and the borrower's story still matter to a responsible private lender, they're just not the primary test the way they are at A, which is exactly what the rest of this course unpacks.

Equity-driven lending: how private mon →