Canadians who turn to alternative lenders report stronger financial outcomes, yet most still see private mortgages as a last resort
An awareness gap around private mortgage lending persists across Canada, even as those who have used alternative financing report overwhelmingly positive results, according to a new national study released this week.
The 2026 Canadian Private Mortgage Lending Report, commissioned by CMI Financial Group, one of Canada's largest non-bank lenders, and conducted by Angus Reid, finds that just six per cent of Canadians have used a private mortgage lender, but more than half of those borrowers (56 per cent) say the experience improved their long-term financial standing. Only 11 per cent reported a negative outcome.
The findings point to a perception problem that financial advisors and mortgage brokers may be uniquely positioned to address.
"Canadians' financial lives look very different today from how they were in decades past," said Bryan Jaskolka, CEO of CMI Financial Group, which has funded more than $4 billion in mortgages over more than 20 years in business. "The economics have largely changed, while the criteria for traditional mortgage financing have only become more stringent."
Widespread unfamiliarity shapes perception
Despite nearly two-thirds of Canadians (64 per cent) having at least heard of alternative mortgage lending, only six per cent describe themselves as very familiar with how it works. That limited understanding appears to be driving negative perceptions: 39 per cent of respondents called private mortgages a "last resort," while 37 per cent described them as "risky."
Only one in four Canadians (26 per cent) has either personally considered using a private lender or knows someone who has. Three-quarters have had no direct or indirect exposure at all. For advisors working with clients who are struggling to qualify through traditional channels, this knowledge gap represents both a challenge and an opportunity.
The role of brokers in closing that gap is already evident. Among Canadians who have considered alternative lending, more than half (52 per cent) say they first learned about it through a mortgage broker - underscoring how professional guidance shapes borrower confidence and decisions.
Who is actually turning to private mortgages
The most common reason Canadians sought out a private mortgage lender was to finance a first home or primary residence (71 per cent). Among those borrowers, 56 per cent considered alternative financing because it offered better rates or more flexible terms than major banks could provide.
Ontarians were the most likely to have used an alternative lender (nine per cent), while only 15 per cent of Quebecers reported using or considering a private mortgage.
Income also plays a significant role: Canadians earning more than $100,000 annually were more likely to consider alternative lending (45 per cent) and had the highest familiarity with the space (72 per cent), while those earning under $50,000 were least likely, with 38 per cent viewing it as risky.
Midlife Canadians between the ages of 35 and 54 showed the most openness, with more than one in three (37 per cent) saying they are familiar with alternative lending and 51 per cent indicating willingness to consider it if they could not access traditional financing.
Younger borrowers aged 18 to 34 showed a similar pattern: despite 37 per cent still viewing private mortgages as risky, 67 per cent of those who went ahead reported an improvement in their financial position, and 80 per cent cited better mortgage rates or terms as their primary motivation.
The gap between reputation and reality
Barriers to homeownership remain real for a significant share of Canadians.
While 67 per cent of respondents said they faced no obstacles in securing a mortgage, the remaining 33 per cent cited limited down payment savings (10 per cent), high property prices (eight per cent), self-employment or irregular income (seven per cent), mortgage stress test requirements (three per cent), and credit history (two per cent) as the most common hurdles.
Alternative lending which includes loans provided by private lenders or mortgage investment corporations (MICs) rather than banks or credit unions, is typically used as a short-term bridge toward conventional financing. It often comes with higher interest rates and fees, but places greater weight on property equity and the borrower's overall plan than on income documentation or credit score.
"Alternative lending can act as a bridge towards conventional financing while they stabilize their financial situation," Jaskolka said. "This doesn't mean it's the right solution for every borrower, but it shows that these solutions should be assessed based on someone's circumstances rather than reputation alone."
For brokers whose clients are increasingly gig workers, self-employed, or earning income outside traditional employment structures, the findings suggest that the private mortgage conversation may be overdue. Given that more than half of those who used alternative lending reported a positive long-term outcome, the data makes a case for brokers to become more fluent in the space, not to advocate for private mortgages by default, but to ensure clients aren't ruling them out based on reputation alone.
