Mortgage Cents Inc., Etobicoke, ON

The Private Canadian Mortgage Market
Most Canadians are not familiar with private mortgages. There is nothing inherently complicated about private mortgages; they are just unfamiliar territory for most of us. Simply put, the private mortgage market offers an alternative source of financing to borrowers and a high yield investment opportunity for investors. In today’s market, you can expect an annual yield of 8% to 12% for a moderate level of risk and 13% to 18% for a higher level of risk.
Why Do Borrowers Require Private Mortgages?
There are many reasons why borrowers require private mortgages.
Typical borrowers include those who: are self-employed, wish to consolidate non-mortgage debt, are building their own home or investment property, are buying a cottage, have suffered from poor credit in the past or require access to their home’s equity. They may have a substantial cash down payment available, but do not meet the stringent underwriting criteria of Canadian banks. Additionally, they may require funds for investment in their business or investment properties. Further, borrowers may require private mortgages for the following reasons:
About Your Mortgage Investment
Private mortgages help diversify your portfolio into investments secured by real property. In return for your investment capital, you receive a monthly, fixed income stream made up of interest and / or principal for 6 to 24 month periods. Most mortgage investments are RRSP eligible; this means your private mortgage investment may be held in a self-directed RRSP. Mortgages are an ideal investment for your RRSP because they earn interest income in a tax-sheltered environment.