A private mortgage is funded by an individual investor, mortgage investment corporation (MIC), or syndicate rather than a federally regulated bank or credit union. It is typically used when borrowers cannot qualify for prime or alternative (B-lender) financing due to credit issues, unverifiable income, or unique property types. Private mortgages are generally structured as short-term bridge financing with terms of one year or less, and carry significantly higher interest rates and fees than prime mortgages. Verify current market terms and legal requirements with a BC lawyer, notary, or licensed mortgage broker before proceeding.

Individual private lenders are generally not regulated by the British Columbia Financial Services Authority (BCFSA). However, mortgage brokers who arrange private mortgages must be licensed under the Real Estate Services Act (RESA), SBC 2004, c. 42, and comply with BCFSA Rules. Mortgage Investment Corporations (MICs) are subject to federal regulation under the Income Tax Act if they elect for special tax treatment; verify the regulatory status of any specific lender with a BC lawyer or the BCFSA before entering into any agreement.

Yes. All real estate transactions involving a mortgage in British Columbia require a lawyer or notary public to conduct title searches, prepare and register the mortgage at the Land Title Office, and ensure compliance with the Land Title Act, RSBC 1996, c. 250. Because private mortgages often contain non-standard terms, fees, and prepayment penalties, independent legal advice is essential. Verify all mortgage terms and costs with a BC lawyer or notary before signing any commitment or agreement.

The Property Transfer Tax under the Property Transfer Tax Act, RSBC 1996, c. 378, is triggered by the purchase of property, not by the source of mortgage financing. As of 2026-07-27 (verify current), the general PTT rate is 1% on the first $200,000, 2% on the portion from $200,000 to $2,000,000, and 3% on the portion above $2,000,000, with an Additional PTT of 20% on foreign entities as of 2026-07-27 (verify current). Whether you use a private mortgage, a bank mortgage, or cash does not change the PTT calculation; verify your specific exemptions and rates with a BC lawyer, notary, or the BC Ministry of Finance.

The Prohibition on the Purchase of Residential Property by Non-Canadians Act, SC 2022, c. 10, prohibits non-Canadians from purchasing residential property in Canada (currently extended through January 1, 2027 as of 2026-07-27 — verify current). The ban applies regardless of financing method, including private mortgages. If you are a non-Canadian, verify your eligibility and any exemptions with a BC lawyer or notary and consult Immigration, Refugees and Citizenship Canada before making any offer or entering into any financing agreement.

British Columbia does not set maximum interest rates or cap lender fees for private mortgages (as opposed to payday loans, which are regulated). The federal Interest Act, RSC 1985, c. I-15, governs disclosure of interest rates and prepayment rights, and the federal Criminal Code sets the criminal rate of interest at an annual percentage rate exceeding 60% (as of 2026-07-27 — verify current). Verify all terms, fees, and effective annual interest costs with a BC lawyer, notary, or licensed mortgage broker before committing to any private mortgage.

Yes, private lenders may advance mortgages on strata properties governed by the Strata Property Act, SBC 1998, c. 43. However, private lenders often require additional documentation, including the strata corporation's Form B (Information Certificate), financial statements, and engineering reports, and may refuse to lend on older buildings or those with high special levies. Verify the lender's property criteria and ensure you obtain up-to-date strata documentation and legal review from a BC lawyer or notary before proceeding.

The Home Flipping Tax Act, SBC 2024 (effective January 1, 2025 as of 2026-07-27 — verify current), imposes a tax on profits from the sale of residential property held for less than 730 days, regardless of the type of mortgage financing used. The tax rate decreases as the holding period increases; verify the current rate schedule, exemptions, and filing requirements with a BC lawyer, notary, or licensed tax professional, as the source of your mortgage does not affect the application of the tax.

If you default, the private lender may enforce the mortgage under the Land Title Act, RSBC 1996, c. 250, and the Law and Equity Act, RSBC 1996, c. 253, by demanding full repayment, charging default interest, and initiating foreclosure or judicial sale proceedings in the BC Supreme Court. Private lenders are not required to follow the same loss-mitigation procedures as federally regulated lenders. Contact a BC lawyer immediately if you anticipate or experience default, as timely legal advice may preserve your rights and allow you to negotiate a forbearance or sale.

Yes, private mortgages are commonly used as short-term bridge financing when a buyer needs funds before selling an existing property. Because private lenders focus on property equity rather than income verification, they can often close quickly, and typical terms are six months to one year. Verify all costs (including interest, lender fees, brokerage fees, and legal fees), repayment terms, and prepayment penalties with a BC lawyer, notary, or licensed mortgage broker before using a private mortgage as bridge financing.