How to Choose a Private Lender in Ontario: What to Check

What makes a private lender good?

A good private lender in Ontario quotes what it can actually deliver and discloses every fee before you sign. A good private lender lets you or your broker speak with the people who make the decision, answers and funds when it says it will, works with you when a payment goes wrong, and plans your exit from the first conversation. A good private lender also holds a licence from the Financial Services Regulatory Authority of Ontario (FSRA) that you can check yourself. Stonefield Capital holds FSRA mortgage brokerage licence #13722, and this guide uses Stonefield Capital as the worked example for each point.

Stonefield Capital Inc. holds FSRA mortgage brokerage licence #13722. Stonefield's mortgages are administered by Stonefield Mortgage Administration Inc., FSRA mortgage administrator licence #13636. Stonefield Capital serves Ontario only. Both licences can be checked on FSRA's public list of licensed mortgage brokerages and administrators.

Why the lender matters more than the rate on a private mortgage

A private mortgage usually runs for a year or less.

Over a short term, the fees, the renewal terms and the way a lender treats a late payment can cost more than a full point of interest.

A lender that hides a fee until the payout, or misses a funding date, can cost you money or the deal itself.

The points below are the ones that decide whether a private mortgage gets you where you need to go or keeps you paying private rates for years.

What to check before you choose a private lender

Each point below has its own page: what a good lender does, the questions to ask, and how Stonefield Capital handles it.

1
Honest quotes and no hidden fees
What a transparent private lender discloses before you sign: the rate, every fee, the cost-of-borrowing disclosure, and what it costs to pay the loan off.
2
Direct access to the people who decide
Why it matters that you or your broker speak with the people who decide on the file, not a chain of departments relaying answers.
3
Speed, service and money that is really there
How quickly a private lender should answer calls and e-mails, issue a commitment and fund, and how to tell whether the money for your loan is already committed.
4
What happens when a payment is missed
What a good private lender does when a payment is missed: early contact, a chance to fix it, and a workable plan before any power of sale.
5
An exit plan, and a team that works with brokers
Why a good private lender plans how you will repay the loan from the first conversation, works with your mortgage broker, and does not keep you in private lending year after year.
6
A licence you can check
How to check a private lender's FSRA licence in Ontario, what each mortgage licence means, and Stonefield Capital's two licence numbers.
7
An honest property value
How a private lender should value your property, why an inflated value hurts the borrower, and when an appraisal is needed.
8
Prepayment and renewal terms up front
What a private mortgage costs to pay off early or to renew, and why both terms belong in writing before you sign.

Warning signs when choosing a private lender

The quote changes at commitment even though nothing in your file changed.
A fee appears for the first time in the final documents.
The lender will not tell you its licence number.
Someone presses you to sign before you have read the cost-of-borrowing disclosure.
Nobody can tell you what happens if you miss a payment.
Nobody asks how you plan to repay the loan.

What borrower reviews tell you that a lender's website cannot

Every private lender says it is fast, fair and transparent.

Reviews from past borrowers and brokers show how a lender behaved when a file was hard: whether the final cost matched the quote, whether calls were returned, and how a problem was handled.

Read the reviews that describe a problem, not only the five-star ones, and look at how the lender responded.

Read what borrowers say about Stonefield Capital.

Questions about choosing a private lender

Is a private lender regulated in Ontario?

Yes. A business that lends or arranges mortgages in Ontario generally needs a mortgage brokerage licence from the Financial Services Regulatory Authority of Ontario (FSRA). A company that administers mortgages for others needs a mortgage administrator licence. Banks, credit unions and insurance companies are regulated under separate rules. You can check a licence on FSRA's public list.

Should I choose the private lender with the lowest rate?

Not on the rate alone. Compare the all-in cost: the interest for the months you expect to keep the loan, the lender fee, any broker fee, the legal costs, and the fees to renew or pay out. A lower rate with a large fee at the payout can cost more than a higher rate with no extra fees.

Can my mortgage broker help me choose a private lender?

Yes. A licensed mortgage broker or agent places files with private lenders regularly and knows how each lender behaves on fees, timing and missed payments. Ask your broker the questions in this guide about each lender the broker suggests.

How long does a borrower usually keep a private mortgage?

A private mortgage is usually a short bridge of a year or less to a longer-term solution, such as a bank mortgage, a sale, or a refinance once credit or income improves. A good private lender talks about that exit before the loan is funded.

What borrowers say about Stonefield Capital

Reviews from past borrowers and brokers show how a lender behaves when a file is hard.

Read Stonefield Capital’s reviews →

How to Choose a Private Lender in Ontario