First Mortgage in Calgary: Private First Mortgages Explained
A private first mortgage becomes the main loan on your Calgary home when no bank or credit union will approve you in time — for a purchase on contract income, a renewal your lender declined, or to clear tax or mortgage arrears. It's the lowest-cost form of private lending. Here's how it works in Calgary, with Alberta's rules in mind.
Key takeaways
- A private first mortgage is the senior loan on title, repaid first in a judicial sale.
- Typical 2026 pricing: about 7% to 11% interest-only, 1% to 3% lender fee.
- Alberta has no land transfer tax; you pay land titles fees, including a mortgage registration levy.
- Alberta lenders often keep loan-to-value conservative because of the Law of Property Act.
What is a private mortgage?
A private mortgage is a loan on property from a non-bank lender — a mortgage investment corporation, a private lending company or an individual investor — approved on equity and the property rather than bank ratios or the stress test. In Alberta, mortgage brokers are licensed by RECA.
What is a second mortgage — and how is a first different?
A second mortgage adds money behind an existing first. A private first pays out your existing lender or finances a purchase, and becomes the senior loan. It costs less per dollar than a second but carries a private rate on the whole balance. Compare with a second mortgage if your current first has a good rate.
Why are private mortgage positions important?
In an Alberta foreclosure, the first mortgage is repaid first from a court-approved sale. Because the Law of Property Act often limits a lender to the property on mortgages given by individuals, a first-position lender's security is the property's value — so it lends at a level it's confident the home will cover.
Who lends private first mortgages in Calgary?
- Alberta and national mortgage investment corporations.
- Private lending companies active in Calgary and surrounding communities.
- Individual investors, through RECA-licensed brokerages.
How does the payment work on a Calgary private first mortgage?
Interest-only, monthly. Example: a $620,000 Calgary home with a $434,000 private first mortgage (70% loan-to-value) at 9.49%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $3,366.26 |
| Interest over 12 months | about $40,395 |
| Lender fee (2%) | $8,680 |
| Broker fee, where one applies (1%) | $4,340 |
| Legal and appraisal (estimate) | about $2,100 |
| Mortgage registration levy | about $485 |
| Effective first-year cost | about 13.4% of the net funds |
What's the term of a private first mortgage?
Usually 12 months. Plan the move back to a bank or credit union — typically once a full year of income is on your tax return or credit has recovered.
What are the criteria to get approved for a private first mortgage in Calgary?
- Loan-to-value up to about 75% on marketable homes; lower on condos, acreages and properties outside the city.
- An appraisal and clear title, with property taxes current.
- For purchases, a down payment of at least 25% plus legal and land titles costs.
- Proof of ability to pay — contracts, deposits or a prepaid reserve.
- A realistic exit.
Why are private first mortgage rates higher than traditional mortgages?
Private lenders use investor capital, can't insure their loans, take on borrowers outside bank rules and must recover their costs over a short term. Alberta's court foreclosure and limits on personal recovery add to the lender's risk.
What are the pros and cons of a private first mortgage in Calgary?
| Pros | Cons |
|---|---|
| Lowest-cost private option | Private rate on your whole balance |
| Works with uneven energy, trade and contract income | Conservative loan-to-value limits |
| No land transfer tax on purchases | Lender fee, legal and appraisal costs |
| Redemption period and borrower protections in Alberta | Short, interest-only term |
Sources
This article is general information, not financial or legal advice. Rate and fee ranges are typical of the private market in 2026 and vary by lender, property and file. Examples are illustrative and rounded, not market averages. Mortgage financing is subject to lender approval.
Frequently asked questions
Yes, usually with at least 25% down. There's no land transfer tax, but budget for legal fees and land titles charges.
For land other than farm land, six months by default, which the court can shorten or extend.
Yes, if your bank won't renew and you have enough equity. Start looking two to three months before maturity.
Often, if it will approve you — credit unions set their own rules and are usually cheaper than private lenders.
Need a private first mortgage in Calgary?
We'll compare Alberta private lenders, MICs and credit unions and show every cost in writing.