A private mortgage rate is the interest rate charged by non-institutional lenders such as individuals or private lending companies, typically ranging from 8% to 18% in Canada, and is significantly higher than bank rates to compensate for the increased risk of lending to borrowers who may not qualify for conventional financing. For Canadian real estate investors, private mortgages can provide short-term bridge financing or fund deals quickly when traditional lenders decline, but the higher carrying costs must be carefully factored into investment returns.
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