A private mortgage is a loan from a non-bank lender — usually secured against a property's equity rather than a borrower's income or credit history. People typically need one when a bank says no: credit issues, foreign or irregular income, self-employment without conventional documentation, or a property that's hard to finance conventionally.
Here's the part almost nobody explains clearly: even once you understand you need to look outside a traditional bank, where your property sits on a map can close doors that have nothing to do with your income or your credit score at all.
| Bank / A Lender | Alt-B Lender | Private Mortgage | |
|---|---|---|---|
| Credit needed | Good to excellent | Fair, alternative docs okay | Often flexible — equity-based |
| Property location | Broad, some restrictions | Urban/suburban only — rural often excluded | Broad, including rural |
| Payment structure | Amortizing (principal + interest) | Usually amortizing | Typically interest-only |
| Typical rate | Lowest | Moderate premium | Highest — reflects risk and flexibility |
That second row is the one that surprises people. Alt-B lenders exist specifically to say yes when a bank says no — but many of them only lend in populated, marketable centres: Halifax Regional Municipality core communities, Truro, Sydney, the Annapolis Valley. A genuinely rural Nova Scotia property can be excluded from that entire category, regardless of how strong the file otherwise looks.
This is where a private mortgage earns its reputation as the flexible option — because most private lenders don't carry the same geographic restrictions. But private mortgages come with their own trade-off people are often uneasy about: they're usually interest-only, meaning your balance doesn't shrink on its own the way it would with a traditional amortizing bank mortgage.
If you've been told "no" by a bank and assumed Alt-B is the obvious next step, it's worth checking the fine print on lending area before you get your hopes up — especially if your property isn't in a core urban centre. And if a private mortgage is where you land, don't assume interest-only is the only shape it can take. The right structure depends on your actual goals, not just what's offered first.
Securing the right mortgage — especially when your situation doesn't fit a standard bank box — requires knowing which lenders actually say yes to your specific circumstances, and which ones just look good on paper. I work across residential, private, and commercial financing throughout Nova Scotia, Ontario, New Brunswick, and PEI.
Ready to find out what's actually available for your property? Let's talk.