Private mortgages with alternate lenders are not going to offer rates that a bank or credit union would offer. Put bluntly: they are very expensive loans. They can charge up to 5.95% to 6.95% for first mortgages and 7.95% to 10.95% for second mortgages depending on the loan to value (LTV), type of property, and current market rates. Plus, private loans come with additional lender fees you’ll need to pay upfront (totalling about 2% to 4% of the loan amount). A prime, ‘A lender’ would typically charge mortgage rates under 3% (depending on current market rates) and don’t charge lender fees. Private loans come with a minimum 75% to 80% loan-to-value (LTV) ratio. That means you’ll need a down payment of 20% to 25% to purchase a property with a private lender. Mortgages with financial institutions (i.e. banks) require as little as 5% down. Private lender terms last for 1-3 years and have no amortization period since the monthly payments are towards interest only. By comparison, traditional mortgages come with up to 35-year amortization periods. Their monthly payments use what are called “blended payments,” since they go towards both the interest and principal on the loan. In general, alternative lenders are in the business of turning high yields quickly. They want to make a profit on their loan, and then pass you to a bank as soon as possible. When you take out a private mortgage in Vancouver, your monthly payments go towards interest alone; you won’t be paying down the balance on your home’s worth. With a traditional mortgage, monthly payments go to both the interest and “principal” payments (i.e. the value of the home). Please see more on our website.