Equity-Based Financing When Time Matters.
Private lending is short-term financing secured mainly by the equity in your property. It exists for situations that fall outside bank and B-lender guidelines — but it comes at a higher cost, so it works best as a bridge with a clear plan to move on.
What private lending is
Financing from private sources, priced for risk and speed rather than the lowest rate.
Private mortgages are funded by individuals or by mortgage investment corporations (MICs) — pools of investor capital managed to lend against real estate. Unlike a bank (an A lender) or a B lender, a private lender's primary question is not your income or credit score; it is how much equity sits in the property and how marketable that property is.
Because the loan is underwritten mainly against equity, the file can be assessed differently than a traditional application. That flexibility is the entire point — but it also means the loan is meant to be temporary. Private mortgages are almost always structured as short-term financing, not a long-term home for your mortgage.
This page is general information only. It is not advice or a commitment to lend. Whether private financing is available, and on what terms, depends on the lender, the equity, the property and the specifics of the file — the final decision always rests with the lender.
Common uses
Situations where speed or an unusual circumstance matters more than the headline rate.
Covering the gap when a purchase closes before a sale completes, or when funds are tied up until a longer-term solution is in place.
A short-term facility that gives a borrower time to resolve arrears or rebuild credit, with the goal of qualifying for A or B financing later.
Homes or situations that fall outside standard lender guidelines — condition, zoning, rural location or property type that mainstream lenders decline.
Circumstances where conventional processing timelines don't fit the situation and equity-based financing can be arranged on a shorter horizon.
Business owners whose income is real but hard to document in the way A lenders require, using property equity to bridge until the paperwork lines up.
Costs & terms
Private financing is higher-cost by design — understand the full picture before you commit.
Private mortgages carry higher interest rates than bank or B-lender financing, reflecting the added risk and flexibility. On top of the rate, expect lender and broker fees, which are typical for this type of financing and are usually disclosed up front. Independent legal advice is commonly recommended before signing.
Terms are usually short — often around one year — and frequently structured as interest-only, which keeps monthly payments lower during the bridge period. Lenders also set a maximum loan-to-value (LTV) limit, so the amount available depends on how much equity remains in the property after existing charges.
Numbers vary widely from lender to lender and file to file, so treat any figures as general and illustrative rather than a quote. Availability through GNE Mortgages varies and is always subject to lender approval.
The exit strategy
A private mortgage without an exit plan is a problem waiting to happen.
A private mortgage is a bridge, not a destination. Before taking one on, there must be a realistic, specific plan to get out of it before the term ends — because the higher cost is only worth it for a defined, limited period.
In practice, the exit usually means one of two things: refinancing into A or B lending once the qualifying issue is resolved, or selling the property. Either way, the plan should be mapped at the very start, not left until renewal approaches.
If your goal is to graduate to more traditional financing, it helps to understand where the B-lender path fits. Learn more about B lenders and alternative A/B financing as a likely destination for your exit.
Related pages
Lending Options
The full spectrum from A lenders to B lenders to private — and where each one fits.
B Lenders
Alternative lenders for borrowers who don't quite fit bank guidelines — a common exit from private.
Alternative Lending
How non-traditional financing works when your situation calls for a different approach.
Refinancing
Restructuring your mortgage — often the mechanism used to exit a private loan.
Need a short-term solution?
Let's map a private option and, most importantly, the exit.