Rental Property Loans From Private Lenders

Loans from private lenders when everyone else said no

Rental property loans from private lenders are a fit when you can't get bank or alternative mortgage financing. This may be due to credit problems or because you own more than 8 doors/units including the primary residence -- maximum four units per property. 

After that, your rental properties are considered commercial mortgage real estate. Now you'll need to rely on either commercial lending or go down the easier but a bit more expensive route with private mortgages Ontario.

loans-from-private-lenders.jpgLoans from private lenders for residential rental properties.

Private lenders are more creative, flexible

If you don't qualify for mortgage under the residential rental lending then private lenders could be a good options for rental property loans. Private mortgage lenders can be more creative and flexible - their main focus is on the value of the property and your ability to make payments on the mortgage.

Interest only private second mortgage

Reader to our website asks: can I get an interest only mortgage rental property - The short answer is YES you can get a private equity loan from private mortgage lenders.

First and private 2nd mortgages usually carry interest only payments. This keeps your payments low giving you a chance to adjust your investment plans. But for longer term strategy, principal and interest payments can be arranged.

For example, rental property loans from private lenders can kick in when you have a low 1st mortgage and need to top it up with rental property loans from 2nd mortgage lenders Ontario.

In situations where you may need money for rental property renovations, interest only mortgage loan can be secured if there is enough equity remaining in the property for a private second mortgage.


Private mortgages in Ontario can also be useful sources of bridge financing as an investment property mortgage in the following ways:

  • Private mortgage can act as a bridge loan to achieve a fast closing on a purchase. For properties where the borrower is putting down 25% to 50%, the closing can take place in a matter of days. This allows you to be more aggressive on deals as you know financing will be there to close on time. Once the private mortgage bridge loan is in place, you will have time to locate optimal longer term financing if it’s your intention to retain the property into the future.
  • For buyers who what to buy and flip, with or without improvements, a private bridge loan will again allow for a quicker and potentially higher leverage for the short period of time the funds will be needed.

Investment properties loans

Rental property loans from private lenders are more costly than institutional, but the speed of closing and short term interest only repayment options may pay for themselves in getting deals closed, without putting stress on your cash flow.

Because you are using this money to invest -- you can expense your rental property mortgage interest and reduce your personal taxes.

If you need more expensive or private mortgage lenders financing - mortgage interest and closing costs on your rental property loans qualify as an investment expense on your tax returns. 

Marie Copeland FSU, Hamilton Mortgage Broker Ontario, Private mortgages Ontario

Top to rental property loans from private lenders

If you’re buying and selling rental properties then give me a call any time you require investment property mortgage financing.

I will work with you to get the deal closed.

*Lenders change their products and interest rates regularly and without notice. Always check for lender updates.

Axcess Mortgage and Loans Financing Co. Ltd. | FSRA 10420

1 (905) 537-8815

Banks and AAA lenders pay us for your service. Some alternative mortgage financing and all private mortgage broker fees are payable by clients.