First Mortgage in Mississauga: Private First Mortgages Explained
A private first mortgage is the main loan on your Mississauga home when a bank or B lender can't approve you in time — for a purchase, a declined renewal, or to clear arrears. It's approved on your equity and the property, and it's priced for the risk. Here's how it works in Mississauga, with a worked example.
Key takeaways
- A private first mortgage is the senior loan on title — paid first if the home is sold.
- Typical 2026 pricing: about 7% to 11% interest-only, 1% to 3% lender fee.
- Lenders commonly go to 75% to 80% of value on houses and about 65% on townhouses and condos in larger complexes.
- Mississauga purchases pay Ontario land transfer tax only — there's no municipal tax as in Toronto.
What is a private mortgage?
A private mortgage is a loan on real estate from a non-bank lender — a mortgage investment corporation, a private lending company or an individual investor. It isn't subject to the federal stress test or bank debt-service limits. In Ontario it's arranged through an FSRA-licensed brokerage, which must give you written disclosure of the costs.
What is a second mortgage — and how is a first different?
A second mortgage adds new money behind an existing first. A private first replaces your existing lender or funds a purchase. It's cheaper per dollar than a second but carries a private rate on your whole balance. If you have a low-rate first mortgage with time left, compare a second mortgage before switching.
Why are private mortgage positions important?
Under Ontario power of sale, the first mortgage is paid before any other charge (after costs and property tax arrears). That priority lets first-position lenders offer the lowest private rates and highest loan-to-value. It also gives the first lender a say in whether a second can be added later.
Who lends private first mortgages in Mississauga?
- Mortgage investment corporations active across the GTA.
- Private lending companies for quick closings and complex files.
- Individual investors arranged through licensed brokerages.
How does the payment work on a Mississauga private first mortgage?
Interest-only, monthly. Example: a $900,000 Mississauga townhouse with a $585,000 private first mortgage (65% loan-to-value) at 8.99%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $4,302.73 |
| Interest over 12 months | about $51,633 |
| Lender fee (2%) | $11,700 |
| Broker fee, where one applies (1%) | $5,850 |
| Legal and appraisal (estimate) | about $2,100 |
| Effective first-year cost | about 12.6% of the net funds |
Condominium or common-element fees on a townhouse come on top, and lenders will want them current.
What's the term of a private first mortgage?
Typically 12 months. Use it to complete what the bank needs — income history, a credit rebuild, a property sale — then refinance. Confirm the prepayment terms up front.
What are the criteria to get approved for a private first mortgage in Mississauga?
- Loan-to-value of about 75% to 80% on houses, about 65% on condo-style properties.
- An appraisal; for condominium townhouses, a status certificate.
- For purchases, a down payment of at least 20% to 35% plus Ontario land transfer tax and legal costs.
- Proof the interest payments are affordable.
- A realistic route back to a bank or B lender.
Why are private first mortgage rates higher than traditional mortgages?
Private lenders fund with investor capital, can't insure their loans, take on borrowers the banks declined and must earn their return over a short term. First position reduces those risks but doesn't remove them.
What are the pros and cons of a private first mortgage in Mississauga?
| Pros | Cons |
|---|---|
| Lowest-cost private option | Private rate on the whole balance |
| Fast purchase and renewal solutions | Lender, legal and appraisal fees |
| No municipal land transfer tax on purchases | Lower limits on condo-style properties |
| Approval on equity | Interest-only, short 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 35% down, and the lender will review the building's status certificate.
If they're on title and the mortgage, private lenders will usually consider their ability to help pay.
Whenever you qualify and your private mortgage allows prepayment — many become open after a few months.
Per dollar, yes. Overall, it depends on your current first mortgage's rate and the size of the new money.
Need a private first mortgage in Mississauga?
We'll compare GTA MICs and private lenders and show every cost in writing before you commit.