• Equity-based approval — private lenders weigh your property’s value, not your credit score
• Fast closing — private mortgages can fund in 3–7 business days for urgent situations
• Bridge, not destination — every CMS private mortgage includes a defined exit plan to institutional lending
• Greater Sudbury coverage — private lenders finance properties in the core and outlying communities

When Private Lending Makes Sense in Sudbury

Private mortgages fill the gap when institutional lenders — both A and B tier — cannot act quickly enough or cannot approve the deal at all.

Credit is severely damaged. A Sudbury homeowner with a score below 500, active collections, or a very recent consumer proposal or bankruptcy discharge will not qualify with even flexible B lenders. Private lenders approve based on property equity. If the home has 20 to 25 percent equity, a private lender will consider it regardless of the credit report. In a city where mining layoffs can cascade into missed payments and credit damage within months, this safety net matters.

Income cannot be documented to institutional standards. Greater Sudbury has a significant population of mining contractors, equipment operators, seasonal workers, and small business owners whose income does not fit standard documentation models. A heavy equipment operator running contracts across Northern Ontario who earns $130,000 but declares $60,000 after equipment depreciation will not qualify with a bank. B lenders have alternative programs, but some situations fall outside even those. Private lenders require minimal income documentation because the property secures the loan.

Time is critical. Institutional approvals take weeks. Private lenders can approve and fund in three to seven business days. For power of sale situations — where a lender has issued a Notice of Sale and the clock is ticking — that speed is the difference between keeping your home and losing it. For urgent financial obligations like CRA enforcement or family law deadlines, private lending provides the speed that banks cannot match.

The property is non-standard. Greater Sudbury’s housing stock includes properties that banks will not finance through standard programs — rural homes on large lots in Hanmer or Val Caron, mixed-use properties, homes with well and septic systems, and older properties in some neighbourhoods that do not meet institutional condition requirements. Private lenders evaluate these individually and are often comfortable where banks are not. CMS works with lenders who specifically understand the Greater Sudbury market and its geographic diversity.

How Private Mortgages Work

Private lenders are individuals and investment funds that lend against real estate equity outside the banking system. Their approval process is simpler: evaluate the property’s appraised value, calculate LTV, review the borrower’s situation at a high level, and decide — often within 24 to 48 hours. The result is faster funding at higher cost than institutional lending.

The process through CMS begins with a phone call. Your broker collects the basic details — property address, estimated value, existing mortgage balance, what you need the funds for, and any relevant background. From there, CMS identifies the right private lender for the property type and situation. An appraisal is ordered, the lender reviews and issues a commitment, and the file goes to a real estate lawyer for closing. From initial call to funded mortgage, the timeline is typically one to two weeks for straightforward deals and as little as three to five business days when urgency demands it.

Private mortgages in Ontario are regulated. Brokers must be FSRA-licensed. Terms are documented in a standard commitment letter and registered on title through a real estate lawyer. CMS works exclusively with established, transparent private lenders who disclose all costs before you commit. There are no surprises at closing.

Private First vs. Private Second

A private first replaces or provides the primary financing when no institutional lender can approve the file. A private second sits behind an institutional first, providing additional funds without disturbing the first’s rate or terms. The choice depends on whether you have an existing first mortgage worth preserving.

In Sudbury, private seconds are common among homeowners who locked in competitive first mortgage rates during lower-rate periods and now need equity access for debt consolidation, renovations, or emergency expenses. Breaking that first would mean losing a rate they cannot replicate today. A private second of $30,000 to $60,000 behind that first solves the immediate need, and at renewal the two can be combined into a single institutional mortgage. For more detail on this comparison, see the first and second mortgages page.

Rates, Fees, and Full Cost

Private rates in Ontario typically range from 7 to 12 percent annually, with most Sudbury residential deals in the 8 to 10 percent range. The exact rate depends on LTV, property type, location within Greater Sudbury, and the borrower’s overall situation. Lower LTV ratios generally command better rates because the lender’s risk exposure is reduced.

Lender fees are two to four percent of the mortgage amount, paid at closing from proceeds. On a $120,000 private mortgage the fee is $2,400 to $4,800. Legal fees and appraisal costs add $2,500 to $4,000. CMS provides complete cost disclosure — total cost to close, monthly payment, projected total interest over the term — before you sign anything.

Sudbury’s lower property values work in the borrower’s favour on cost. A private mortgage of $250,000 at 9 percent produces a monthly interest cost of approximately $1,875. In the GTA, private mortgages of $500,000 to $700,000 are common — the monthly interest cost is proportionally higher and can strain household budgets more severely. Sudbury’s affordability means the private mortgage is more manageable as a transitional tool, and the exit to institutional lending is easier to achieve because the qualifying amounts are lower.

The Exit Strategy

Every CMS private mortgage includes a defined exit plan. Private rates and fees are too high for permanent borrowing — CMS will tell you that directly. The goal is always to transition to institutional lending as quickly as your situation allows.

For credit rebuilding: 12 months of on-time payments, utilization below 30 percent, two active tradelines, transition to B lender at renewal. An Orangeville homeowner who entered private lending with a 480 score can realistically reach the 550 to 580 range needed for B lender qualification within 12 months of disciplined credit management. For self-employed income documentation: 12 to 24 months of bank statement accumulation for a B lender stated-income program — particularly relevant for Sudbury’s mining contractors and trades workers. For power of sale intervention: stabilize payments, rebuild the file, refinance institutionally before the private term expires.

CMS reviews progress at the six-month mark — a working session to confirm the exit plan is on track and begin the refinancing process early. The worst outcome is a private mortgage renewing into another private term because no progress was made. CMS actively prevents that by maintaining contact and holding borrowers accountable to the plan.

Common Sudbury Scenarios

Mining Sector Layoff Recovery

A homeowner in New Sudbury has fallen behind on payments after a six-month layoff from one of the major mining operations. Credit score has dropped to 510, and three credit cards are in collections. The home is worth $475,000 with a $280,000 first mortgage — significant equity. CMS arranges a private refinance at $360,000 that pays out the existing mortgage, clears the consumer debt, and stops collection calls. During the one-year private term, the homeowner returns to work, makes every payment on time, rebuilds two active tradelines, and reaches a 580 score. At renewal, CMS transitions the file to a B lender at roughly half the private rate — a meaningful monthly savings that continues the credit recovery trajectory.

Power of Sale Emergency

A couple in the South End has fallen four months behind after a medical emergency drained savings. Their lender issues a Notice of Sale. The home is worth $520,000 with a $290,000 first — $230,000 in equity at risk of being lost in a forced sale. CMS arranges a private first mortgage to pay out the existing lender within five business days, clearing arrears and stopping the power of sale process. The couple stabilizes finances during the one-year term and transitions to a B lender at renewal. The equity they nearly lost is preserved, and the path to A lender qualification begins.

Self-Employed Purchase

A heavy equipment contractor operating across Northern Ontario has found a detached home in the Lake Ramsey area for $580,000. He has $150,000 for a down payment and strong gross revenue, but his T1 income is too low for even B lender qualification after equipment and vehicle write-offs. A private first mortgage funds the purchase at 74 percent LTV. The exit plan: 12 months of bank statement accumulation showing consistent deposits, plus on-time mortgage payments, positions the file for B lender refinancing at renewal. The contractor gets the home now and the better rate within a year.

Property Type Challenge

A buyer wants to purchase a property in Hanmer on a two-acre lot with well and septic. The property is listed at $420,000 and the buyer has $100,000 down. The lot size and servicing disqualify it from standard CMHC insurance, and the buyer’s 620 credit score limits institutional options for a conventional mortgage on a non-standard property. A private first mortgage funds the purchase at 76 percent LTV. At renewal, CMS identifies a B lender with a rural property program that can take over the file — possible because the buyer now has 12 months of perfect payment history on the exact property. Call 905-455-5005 to discuss your situation.