First Mortgage in Hamilton: Private First Mortgages Explained
A private first mortgage in Hamilton is usually about speed or flexibility: buying a property a bank won't finance as-is, closing before your income can be documented, or replacing a lender that declined your renewal. It becomes the main mortgage on your home, approved on equity, at private rates. Here's how it works.
Key takeaways
- A private first mortgage is the senior loan on your property, paid first from any sale.
- Typical 2026 pricing: about 7% to 11% interest-only, with a 1% to 3% lender fee.
- Private lenders can finance properties that need work, which some banks won't — at a lower loan-to-value.
- Hamilton purchases pay Ontario land transfer tax only; there's no municipal tax.
What is a private mortgage?
A private mortgage is a loan on your home from a non-bank lender — a mortgage investment corporation, a private lending company or an individual investor. Private lenders don't apply the federal stress test, and they look mainly at the property and your equity. In Ontario they lend through FSRA-licensed brokerages, which must disclose the costs in writing.
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 funds a purchase, and takes the senior position. Its rate is lower than a second's but applies to your whole balance; compare both if you already have a low-rate mortgage. See second mortgages in Hamilton.
Why are private mortgage positions important?
In a power of sale, the first mortgage is paid first. That lets a first-position private lender accept higher loan-to-value and charge less than a second lender would — and gives it control over whether other charges can be registered behind it.
Who lends private first mortgages in Hamilton?
- Mortgage investment corporations with southern Ontario lending programs.
- Private lenders who finance renovation and "as-is" purchases.
- Individual investors, through licensed brokerages.
How does the payment work on a Hamilton private first mortgage?
Interest-only, monthly. Example: a $740,000 Hamilton home with a $518,000 private first mortgage (70% loan-to-value) at 9.49%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $4,017.80 |
| Interest over 12 months | about $48,214 |
| Lender fee (2%) | $10,360 |
| Broker fee, where one applies (1%) | $5,180 |
| Legal and appraisal (estimate) | about $2,100 |
| Effective first-year cost | about 13.2% of the net funds |
What's the term of a private first mortgage?
Usually 12 months. For a property bought to renovate, the plan is often to finish the work, have it re-appraised and refinance with a bank or B lender based on the improved value.
What are the criteria to get approved for a private first mortgage in Hamilton?
- Loan-to-value up to about 75% to 80% on marketable homes; lower on properties needing significant work.
- An appraisal that reflects condition — "as is" and sometimes "as complete" values.
- Insurance in place on the property.
- For purchases, a down payment of at least 20% to 25% plus Ontario land transfer tax and closing costs.
- Proof of ability to pay and a defined exit.
Why are private first mortgage rates higher than traditional mortgages?
Private lenders use investor capital, can't insure the loan, and take on borrowers or properties that banks declined, over a short term. That's priced into the rate and the lender fee — even in first position.
What are the pros and cons of a private first mortgage in Hamilton?
| Pros | Cons |
|---|---|
| Can finance properties that need work | Lower loan-to-value on those properties |
| Lowest-cost private option | Private rate on your whole balance |
| Fast closings | Fees on every new loan |
| No municipal land transfer tax | 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
Often, yes. Private lenders lend on the "as is" value, sometimes with renovation funds released in stages, at a lower loan-to-value than for a move-in-ready home.
No. Hamilton buyers pay Ontario's land transfer tax only.
Once the work is done, a new appraisal can support a bank or B-lender mortgage at the higher value, if your income and credit qualify.
Yes. Lenders consider the rental income and the property's condition, and may lend a little less than on a single-family home.
Need a private first mortgage in Hamilton?
We'll compare private lenders and MICs and show the full cost — and the refinance plan — in writing.