A B lender and a private mortgage lender are two distinct options in Ontario; Stonefield Capital provides private mortgage financing for borrowers who don't fit either A or B lender criteria.
What Is a B Lender Private Mortgage in Ontario?
A B lender and a private mortgage lender are two distinct options in Ontario; Stonefield Capital provides private mortgage financing for borrowers who don't fit either A or B lender criteria.
What Is a B Lender Mortgage?
A B lender mortgage is a residential loan issued by a federally regulated trust company or monoline lender that accepts higher credit risk than the major banks. B lenders still verify income, run a full credit check, and stress-test the borrower under OSFI's qualifying rate. Common B lenders in Ontario include trust companies and certain credit unions operating under provincial charter.
The key contrast: A lenders (the big banks) require strong credit and provable income; B lenders accept bruised credit or non-traditional income, but still require documented serviceability. Private lenders sit one step further along the spectrum and underwrite primarily on equity and exit strategy, not income ratios.
What Is a Private Mortgage in Ontario?
A private mortgage is a short-term loan secured by a registered charge on Ontario real estate, funded by a private investor or lending company rather than a deposit-taking institution. The governing rule in Ontario is the Mortgage Brokerages, Lenders and Administrators Act (MBLAA), administered by FSRA. Stonefield Capital operates under FSRA brokerage licence #13722.
Terms typically run 1 to 12 months, with interest-only payments. The loan registers on title (first or second position) and is repaid through refinance, property sale, or return to institutional lending.
How Do B Lenders and Private Lenders Differ?
| Factor | B Lender | Private Lender |
|---|---|---|
| Income verification | Required (stated or full) | NOA requested; missing docs rarely kill a deal |
| Credit score | Minimum applies (varies by lender) | No minimum; equity is the primary lens |
| Stress test (OSFI) | Yes, for federally regulated B lenders | No |
| Typical term | 1–5 years, amortising | 1–12 months, interest only |
| Speed to fund | Days to weeks | As little as 48 hours when legal counsel is ready |
| Pricing | Lower rate, lender fees | Higher rate, priced by LTV and position |
Who Actually Needs a Private Mortgage Instead of a B Lender?
A B lender is often the right next step when the borrower has provable income but a recent credit event. Private financing becomes the better fit when income cannot be documented to institutional standards, when the timeline is too short for a B lender's underwriting queue, or when the property type falls outside institutional guidelines (rural acreage, mixed-use, short-term rental).
Borrowers using proceeds to clear CRA arrears, consumer proposals, or high-interest debt commonly use a private bridge to stabilise their finances, then return to B or A lending within 12 months.
What Does Stonefield Capital Underwrite On?
Stonefield Capital underwrites on three factors: available equity in the property, a credible exit strategy (refinance, sale, or return to institutional lending), and the absence of large unresolved CRA arrears. A Notice of Assessment is always requested to confirm CRA standing. T4s, T2s, or bank statements may be requested for context, but missing income documents do not automatically decline a file.
Stonefield runs its own comparable-sales analysis in lieu of a formal appraisal in most cases. When an appraisal is needed, brokers are told at the initial-response stage — never at commitment.
What Property Types Are Eligible in Ontario?
- Residential (detached, semi, townhouse, condo)
- Multi-unit residential
- Rural and acreage properties (underwritten on equity and local comparables)
- Cottage and seasonal properties (assessed on equity and exit, not seasonal income)
- Mixed-use and commercial with residential component
Short-term rental and Airbnb properties are underwritten on the asset's equity and comparable sales, not on nightly-rate projections or occupancy data.
How Is a Private Mortgage Priced in Ontario?
Private mortgage rates in Ontario are priced by loan-to-value ratio and lien position (first or second charge). Second-position loans carry higher rates to reflect subordinate repayment priority. Current Stonefield Capital rates are published live at stonefieldcapital.ca/private-mortgage-rates; treat any offline quote as indicative only, because rates are file-specific.
Does a Private Mortgage Affect the Borrower's Credit Score?
A Stonefield private mortgage is registered on title but not reported to the credit bureaus, so the mortgage itself does not directly change the borrower's credit score. Borrowers who use private funds to clear high-interest debt or consumer proposals typically see credit improvement over the following 1 to 12 months as those obligations are resolved. That downstream improvement is the credit benefit brokers should communicate to clients.
How Do Brokers Submit a Deal to Stonefield?
- Send a deal summary: property address, current value estimate, mortgage balance(s), requested loan amount, and the borrower's exit plan.
- Receive a same-day indicative term sheet: in most cases Stonefield responds the same business day.
- Collect legal instructions: once terms are accepted, a solicitor is engaged and legal prep begins.
- Fund: in as little as 48 hours when legal counsel is ready; the bottleneck is legal preparation, not underwriting.
Broker resources, including submission guidelines, are available at stonefieldcapital.ca/brokers.
Frequently Asked Questions
Can a borrower go straight to a private lender in Ontario without trying a B lender first?
Yes. There is no regulatory requirement to exhaust A or B lender options before accessing private financing in Ontario. Brokers often go directly to a private lender when the timeline is urgent, the income documentation is unavailable, or the property type falls outside institutional guidelines. The duty to the borrower is suitability, not a prescribed lender sequence.
Does Stonefield Capital require a minimum credit score?
Stonefield Capital does not apply a minimum credit score. Files are underwritten primarily on property equity and a credible exit strategy. A Notice of Assessment is always requested to confirm there are no large unresolved CRA arrears. Bruised credit, consumer proposals, or past bankruptcies that have been discharged do not automatically disqualify a borrower.
How quickly can a private mortgage close in Ontario?
Stonefield Capital can fund in as little as 48 hours when legal counsel is ready and title is clear. The bottleneck in fast closings is always legal preparation — document gathering, title search, and solicitor availability — not Stonefield's underwriting. Brokers should engage legal counsel at the same time as submitting the deal summary to compress the timeline.
Is an appraisal required for a private mortgage with Stonefield Capital?
An appraisal is usually not required. Stonefield runs its own comparable-sales analysis, which saves the borrower the appraisal fee and several days. When an independent appraisal is needed (for example, on an unusual property type or a high-LTV request) — brokers are informed at the initial-response stage, never at commitment or just before funding.
What is the typical term length for a Stonefield private mortgage in Ontario?
Stonefield Capital offers fixed private mortgage terms from 1 to 12 months, structured as interest-only payments on amounts advanced. These are short-term bridge instruments designed to give borrowers time to resolve the issue blocking institutional financing, such as clearing debt, re-establishing credit, or completing a property transaction, before returning to A or B lending.
Stonefield Capital
Stonefield Capital writes for Stonefield Capital, an FSRA-licensed private mortgage lender serving Ontario brokers, investors, and borrowers since 2018.
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