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A private lender is an individual, syndicate, or company that lends mortgage funds directly, secured by a registered charge against real property, outside the traditional bank and B-lender system.
Private lending is typically the option of last resort or the fastest path to closing — used when a borrower has been declined by A and B lenders, needs short-term bridge funds, or is financing a property that doesn't fit conventional lending criteria. The loan is still registered as a charge on title, giving the lender the same basic legal security as any other mortgage.
A single wealthy individual can be a private lender, but a large share of private mortgage capital actually flows through pooled vehicles such as a Mortgage Investment Corporation (MIC). Private mortgages are especially common as second mortgages, sitting behind an existing first mortgage on title.
Registered securely: like any Canadian mortgage, a private lender's loan is registered as a charge against the property's title, giving the lender a legal claim if the borrower defaults.
The lender itself isn't licensed: individual private lenders aren't licensed the way brokerages are, though the broker or agent who arranges the deal is still regulated (FSRA in Ontario, BCFSA in BC, RECA in Alberta, or the AMF in Quebec).
Often paired with a broker: mortgage brokers and agents source and structure private mortgages, frequently as second mortgages or short-term bridge solutions.
Higher cost, faster approval: private lending trades higher rates and fees for faster funding and more flexible qualification than A or B lenders.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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