Who Lends Second Mortgages in Ontario?

Stonefield Capital lends second mortgages across Ontario, funded directly against registered equity in first or second position on title.

What Is a Second Mortgage?

A second mortgage is a loan registered on title behind an existing first charge, giving the lender a secondary claim on the property's equity. A second mortgage is not a refinance; the first mortgage stays in place. The governing rule is simple: the combined loan-to-value of both charges determines how much equity remains as a buffer.

Who Are the Main Second Mortgage Lenders in Ontario?

Four groups actively lend in second position in Ontario:

• Banks and credit unions: offer second mortgages and HELOCs, but require strong credit, provable income, and a stress test at qualifying rates.
• Mortgage investment corporations (MICs): pool investor capital and deploy it across a portfolio; borrowers deal with a fund, not a direct lender.
• Private individual lenders: individuals who lend their own capital; terms and appetite vary widely and they are harder to reach without a broker.
• Licensed private mortgage brokerages acting as lenders: firms like Stonefield Capital that underwrite, fund, and administer deals in-house under FSRA oversight.

What Makes Stonefield Capital Different From a MIC?

Stonefield Capital funds second mortgages as a direct registered charge on title (in the investor's own name or a nominee corporation, not through a pooled fund unit). Each investor's capital is tied to a specific property, not blended across a portfolio. Stonefield Capital Inc. operates as an FSRA-licensed mortgage brokerage (licence #13722), and Stonefield Mortgage Administration Inc. holds a separate FSRA mortgage administrator licence (#13636).

What Do Banks Require That Private Lenders Don't?

Banks underwrite the borrower first: credit score, debt-service ratios, employment history, and a stress test. Private lenders like Stonefield Capital underwrite the property first: available equity, the quality of the asset, and a clear exit strategy (sale, refinance, or income recovery). Notices of Assessment are always requested to confirm no large CRA arrears; income documents may be requested for servicing context, but gaps in income history rarely stop a deal.

What Property Types Qualify?

Stonefield Capital lends on a wide range of Ontario properties in second position:

• Residential: detached, semi-detached, townhouses, and condominiums
• Multi-unit residential (small apartment buildings)
• Commercial and mixed-use properties
• Cottages and seasonal properties (underwritten on equity and local comparables, not rental income projections)
• Construction and land with a defined exit

Non-standard collateral is assessed on equity and exit, never on nightly rental rates or occupancy projections.

How Is a Second Mortgage Priced?

Second mortgage pricing reflects two core variables: loan-to-value across both charges and the property's lendability. Higher combined LTV means more lender risk, which is reflected in the rate. Current Stonefield Capital rates are published live and described by position and LTV band at stonefieldcapital.ca/private-mortgage-rates. No broker should quote a rate before submitting a deal — pricing is determined at underwriting, not before.

How Fast Can a Second Mortgage Fund?

Stonefield Capital can typically approve a second mortgage within 24 hours of receiving a complete submission. Funding can follow in as little as 48 hours when legal counsel is ready and title is clear. The bottleneck is almost always legal preparation, not underwriting. Borrowers should engage a real estate lawyer at the same time as the mortgage application, not after approval.

What Is the Typical Term?

Second mortgages at Stonefield Capital run on short fixed terms, commonly 1 to 12 months, with interest-only payments. Short terms keep monthly carrying costs lower than amortizing alternatives and are designed around a specific exit: a refinance, a property sale, or a return to institutional lending once the borrower's qualifying profile improves.

How Does a Broker Submit a Second Mortgage Deal?

1. Gather the basics: property address, current first mortgage balance, estimated value, purpose of funds, and borrower's exit plan.
2. Send a scenario first: Stonefield Capital responds to scenarios quickly; a full application is not needed to get an initial read.
3. Receive terms: a commitment letter is issued once underwriting is satisfied with equity and exit.
4. Legal prep: borrower's lawyer reviews and signs; lender's counsel registers the second charge on title.
5. Funding: funds are advanced upon registration of the mortgage.

Brokers can reach Stonefield Capital's underwriting team directly through the broker portal at stonefieldcapital.ca/brokers.

Does a Second Mortgage Affect the Borrower's Credit?

A Stonefield Capital private mortgage is registered on title but not reported to credit bureaus, so it does not directly change a credit score. Borrowers who use second mortgage funds to clear high-interest credit card debt or consumer debt typically see measurable credit score improvement over the following 1 to 12 months as those balances fall. The indirect benefit is real, even though the mortgage itself is not reported.

Frequently Asked Questions

Can a borrower with bad credit get a second mortgage in Ontario?

Yes, in most cases. Private lenders like Stonefield Capital underwrite on equity and exit strategy, not credit score thresholds. There is no minimum credit score requirement. Notices of Assessment are always reviewed to confirm no large CRA arrears, but a bruised or thin credit profile does not automatically disqualify a borrower when the property equity is strong and the exit is clear.

What is the maximum combined LTV for a second mortgage at Stonefield Capital?

Stonefield Capital does not publish a single fixed LTV ceiling because pricing and appetite vary by property type, location, and the quality of the exit plan. Current LTV parameters by position are described at stonefieldcapital.ca/private-mortgage-rates. Brokers should submit a scenario first to get a fast read on whether a deal fits, rather than applying a rule of thumb.

How is a Stonefield Capital second mortgage different from a HELOC?

A HELOC is a revolving bank product where the borrower can draw, repay, and redraw funds up to a credit limit. A Stonefield Capital second mortgage is a fixed-term, interest-only loan for a set amount — funds are advanced at closing and the mortgage is not re-drawable. Stonefield also offers a multiple-draw structure for staged funding needs, but that product is also fixed-term and non-revolving, not a HELOC.

Do I need an appraisal to get a second mortgage through Stonefield Capital?

Usually not. Stonefield Capital runs its own comparable-sales analysis, which avoids the cost and delay of a formal appraisal in most cases. When an appraisal is needed (it is flagged at the initial response stage, never at commitment or on the eve of closing) — typically for unusual property types or higher LTV requests.

What happens if the borrower can't refinance out at the end of the term?

Stonefield Capital builds an exit review into underwriting before the deal is approved, so the exit path is confirmed up front, not hoped for at maturity. If circumstances change near maturity, a term extension or renewal can be discussed. For deals where LTV is higher than appetite allows on its own, cross-collateralizing additional Ontario property is a standard option to improve the lendable position.