16 Oct, 2023
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Securing a mortgage is a crucial step in the journey to homeownership. While many turn to traditional banks and financial institutions for this purpose, Private Mortgage Lending has emerged as an alternative financing option. These lenders offer flexibility and convenience that may not be available through traditional channels. If you’re considering a private lender in Toronto, it’s essential to understand how much you can borrow and the factors that influence the loan amount.

Private Lenders for Mortgages in Toronto

Private mortgage lenders, often referred to as private lenders, are people or businesses who offer mortgage loans outside the framework of traditional banking systems. They can offer solutions for individuals who may not qualify for a bank mortgage due to factors such as:

  • Low credit
  • Irregular income
  • Unique property type

Private lenders assess mortgage applications differently and consider various factors when determining loan eligibility and amounts.

Factors Influencing the Borrowing Amount

When it comes to borrowing from private mortgage lenders in Toronto, several factors influence the borrowing amount.

  1. Loan-to-Value Ratio (LTV)

One of the primary factors that influence how much you can borrow from a private mortgage lender in Toronto is the Loan-to-Value (LTV) ratio. The LTV ratio is the percentage of the property’s appraised value that you can borrow. Private lenders usually offer LTV ratios ranging from 65% to 85%, although some may go higher in certain cases.

  1. Creditworthiness

While private lenders are more relaxed about credit history, your creditworthiness can still impact the loan amount you qualify for. When evaluating your application, private lenders may take your credit score and financial history into account. A strong credit history could result in a more favorable loan amount and terms.

  1. Property Type and Condition

The type and condition of the property you’re financing can also affect the loan amount. Private lenders in Toronto may have preferences for certain property types and may offer different LTV ratios based on factors like whether it’s a residential or commercial property. Additionally, the property’s condition and potential for appreciation may influence the lender’s decision.

  1. Income and Ability to Repay

Private lenders in Toronto will typically request verification of your income and your capability to repay the mortgage. While they may be more flexible than traditional banks, your income and financial stability will still play a role in determining the loan amount. 

  1. Market Conditions

Market conditions can impact the loan amount offered by private lenders. In a competitive market with rising property values, lenders may be more willing to offer higher LTV ratios. Conversely, in a sluggish market, they may be more conservative with their lending.

  1. Interest Rates and Fees

Private mortgage lenders often charge higher interest rates and fees compared to traditional banks. These costs can affect your monthly mortgage payments and the overall affordability of your loan. Be sure to factor in these expenses when determining how much you can borrow.

Typical Loan Amounts from Private Lenders in Toronto

Typical Loan Amounts from Private Lenders in Toronto

Private Lending in Toronto can provide loans ranging from a few thousand dollars to several million dollars, depending on the factors mentioned above. On average, borrowers can expect LTV ratios of around 70% to 80% of the property’s appraised value. For example, if your property is valued at $500,000, you might be able to secure a private mortgage loan of $350,000 to $400,000.

It’s important to note that private lenders may charge higher interest rates and fees compared to traditional lenders. Therefore, it’s crucial to carefully consider the terms of your loan as well as your financial situation before proceeding.


Private Lenders for Mortgages offer a valuable alternative for individuals who may not qualify for traditional bank mortgages. How much you can borrow from a private lender depends on several factors, including the Loan-to-Value ratio, your credit score, property type and condition, income, market conditions, and the lender’s terms, such as interest rates and fees.

If you’re seeking private lending options for mortgages, consider reaching out to ORION Financial. Our team of mortgage brokers can help you determine how much you can borrow based on your unique circumstances. 

Contact us today to learn more about our private mortgage lending options and make an informed decision about your mortgage needs.

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