For example, let’s assume you want to buy a condo for $600,000 in Vancouver, using a private lender. You’ll need to come up with $150,000 as your 25% down payment. That leaves you with a $450,000 loan to apply for. Your mortgage broker helps you apply, and a private lender offers you 6.95% interest on a first mortgage of $450,000, for a 1 year term. You can do the math on your private mortgage like so: $450,000 x 6.95% = $31,275 (1 year of interest). $31,275 / 12 months = $2,606.25 $2,606.25 becomes your monthly interest payment. That means you’ll pay $31,275 in interest for 1 year, before paying back the principal on the loan itself (i.e. before paying back the $450,000). In addition, the private lender will charge a 2% lender fee which is a one-time cost (i.e. no added fees if you renew for another term). In our example above, the lender fee will be $9,000 (paid on closing). If the above seems like a glim scenario, and you’re wondering why anyone would want a private lender mortgage, we’ll explain more on that below! Or, if you’re ready to move ahead, contact us, and we’ll move you on to the next step!