Private mortgage lenders BC: Rates, terms, and your exit strategy
Private mortgage rates in BC currently run 7 to 12% in first position and 10 to 15% in second, plus lender fees of 1 to 3%. Approval is based on the equity in your property rather than your income or credit, which is exactly what makes private lending useful when nothing else fits. But let me be clear about one thing up front: private money is always a bridge. You need a realistic path to an A or B lender within 12 to 24 months, because if you can’t exit when the term ends, your options shrink to renewing at the same high rate or a forced sale.
Who private lending is for
In my experience, private lending makes sense in a handful of specific situations.
Post-bankruptcy or consumer proposal. Private money lets you buy or keep a property while you spend 12 to 24 months rebuilding credit, then exit to a B or A lender at renewal.
Non-confirmable income. Self-employed people and commission earners with real income but no compliant documentation. Around Kelowna that’s often vineyard and orchard contractors, tourism operators, and hospitality workers whose deposits swing with the season. My guide on alt-A mortgage BC covers the middle ground here.
Bridge financing. When closing dates don’t line up, a private bridge for 2 to 4 weeks solves the problem. The rate is high, but the actual cost is trivial relative to the size of the transaction.
Construction or renovation. A property that’s mid-renovation often isn’t financeable through normal channels, so private funds the gap until completion.
Distressed purchases. Estate sales and power of sale situations sometimes need a fast close of 5 to 7 days, and private lenders move faster than any institutional lender.
What private lending actually costs
Here’s a modelled example so you can see the whole picture: a $600K mortgage at a 10% annual rate on a 12-month term. Interest comes to $60,000, the lender fee at 2% adds $12,000, and the broker fee at 1% adds another $6,000. Total cost of capital: roughly $78,000.
So the question to answer before proceeding is simple: is this transaction worth $78K in financing cost? Sometimes it genuinely is. It deserves an honest answer either way.
Lender types
You’ll run into two main sources of private capital. Individual private lenders are high-net-worth people lending their own money; they tend to be slower but more flexible. MICs (Mortgage Investment Corporations) are pooled investment vehicles with institutional underwriting, and they can move fast. They’re also the most common source of private capital in Kelowna. Either way, LTV limits typically sit at 75 to 80% in first position and 85% combined.
Common Kelowna private mortgage scenarios
A few files that cross my desk regularly: a downtown Kelowna pre-sale condo bridge when the appraisal comes in below the contract price. An estate purchase that has to discharge within 60 days. A renovation-to-sell project in Rutland with a second position funding a $150K renovation. And credit recovery bridges, where someone 18 months past a consumer proposal is rebuilding toward the B-lender threshold. If that last one sounds familiar, my bad credit mortgage Kelowna guide goes deeper.
The exit strategy is not optional
Before you accept private financing, I want you to have real answers to these questions. What’s the path back to A or B lending? What’s the timeline? What happens if the primary exit gets delayed? Can you afford the private payment for the full term, plus a 6-month extension if things run long? If the answers are vague, the risk is real. Private lending used as a substitute for a plan isn’t a strategy, it’s just expensive exposure.
FAQ
What are current private mortgage rates in BC?
7 to 12% in first position, 10 to 15% in second, with lender fees of 1 to 3%. Rates vary by LTV, property type, and borrower profile.
Who qualifies?
Private lenders assess property equity more than borrower income or credit. Expect to need 20 to 35% in equity or down payment.
How fast can it close?
5 to 10 business days is standard. A rush close in 3 to 5 days is possible with an experienced broker relationship.
What is a MIC?
A pooled investment vehicle that deploys private mortgage capital, with federal securities regulation and standardized underwriting. It’s the most common private capital source in BC.
I’m a Kelowna mortgage broker and I work across all three lending tiers, so you’ll get a straight answer on whether private money actually fits your situation. Call me at 250-859-2100.