First Mortgage in Vancouver: Private First Mortgages Explained
In Vancouver, a private first mortgage most often bridges a purchase — buying before selling, or closing while foreign, self-employed or newly earned income is documented — or replaces a lender that won't renew. It's the main loan on your property, approved on equity, and the lowest-cost form of private lending. Here's how it works under BC's rules.
Key takeaways
- A private first mortgage is the senior loan on title, repaid first in any sale.
- Typical 2026 pricing: about 7% to 11% interest-only, with a 1% to 3% lender fee.
- Lenders commonly go to 75% to 80% on houses and around 65% on condos.
- BC property transfer tax is due on a purchase and must be budgeted separately from the down payment.
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 rather than bank ratios or the stress test. In BC, those who arrange and administer mortgages are licensed by BCFSA under the Mortgage Services Act, in force from October 13, 2026.
What is a second mortgage — and how is a first different?
A second mortgage adds borrowing behind an existing first. A private first pays out your existing lender or funds a purchase, and takes first position. It's cheaper per dollar than a second but applies to your whole balance — so if you have a low-rate first mortgage, compare a second mortgage before replacing it.
Why are private mortgage positions important?
In a BC foreclosure, the court-supervised sale repays the first mortgage before any other. That priority is why first-position private lenders offer lower rates and higher loan-to-value than second lenders, and why they can restrict further borrowing behind them.
Who lends private first mortgages in Vancouver?
- BC mortgage investment corporations, often with sharp pricing on well-located Vancouver houses.
- Private lending companies for bridge and purchase financing.
- Individual and syndicated investors, through licensed brokerages.
How does the payment work on a Vancouver private first mortgage?
Interest-only, monthly. Example: a $780,000 Vancouver condo with a $507,000 private first mortgage (65% loan-to-value) at 8.99%, compounded semi-annually:
| Item | Amount |
|---|---|
| Monthly interest-only payment | $3,729.03 |
| Interest over 12 months | about $44,748 |
| Lender fee (2%) | $10,140 |
| Broker fee, where one applies (1%) | $5,070 |
| Legal and appraisal (estimate) | about $2,100 |
| Effective first-year cost | about 12.7% of the net funds |
Strata fees are on top, and lenders will check that they — and any special levies — are paid.
What's the term of a private first mortgage?
Usually 12 months; bridge loans tied to a sale can be shorter. Use the term to sell, document income or rebuild credit, then refinance with a bank, credit union or B lender.
What are the criteria to get approved for a private first mortgage in Vancouver?
- Loan-to-value of about 75% to 80% on houses, around 65% on condos.
- An appraisal; for condos, strata documents, depreciation report and minutes.
- For purchases, a down payment of at least 20% to 35%, plus property transfer tax and legal costs.
- Proof the interest payments are affordable — including foreign income or assets, where lenders accept them.
- A defined exit.
Why are private first mortgage rates higher than traditional mortgages?
Investor capital costs more than deposits, the loan can't be insured, the borrower is outside bank rules, and the lender has a short term to recover its costs. BC's court-based enforcement adds time and expense if a loan goes bad.
What are the pros and cons of a private first mortgage in Vancouver?
| Pros | Cons |
|---|---|
| Bridge a purchase before you sell | Private rate on the full balance |
| Lowest-cost private option | Percentage fees are large on big balances |
| Flexible on foreign and self-employed income | Condos get lower limits and strata review |
| Redemption period if things go wrong | 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. A private first or bridge loan can fund the purchase, repaid from your sale. Make sure the sale timeline is realistic.
Generally no — you pay it from your own funds on registration. First-time buyers and buyers of new homes may qualify for exemptions.
Some do, especially with substantial equity and assets in Canada. Banks are usually stricter.
Refinance once your income, credit or residency documentation meets the bank's requirements, and your private mortgage allows prepayment.
Need a private first mortgage in Vancouver?
We'll compare BC private lenders and MICs and show every cost, plus the exit, in writing.