Lending executive on key priorities for Ontario agents, brokers transacting in private lending
Alternative lending is far from a niche space anymore in Canada’s mortgage market, and its popularity is showing no sign of fading as a growing number of borrowers turn towards the sector.
Nonbank options might once have been seen as a last-gasp solution for borrowers to salvage a deal, but factors including affordability challenges and increasing conservatism among bank lenders have helped change that perception in recent years.
That’s seen a sea change in the client types most typically associated with private lenders and mortgage investment corporations (MICs).
“When we start talking about the client profile, many still assume that it’s clients that are continually struggling, not paying their bills,” Reaza Ali (pictured top), national broker relations manager at Fisgard Asset Management, told Canadian Mortgage Professional. “And that’s not the case anymore, and it hasn’t been the case for many years.
“The alternative and MIC private lending space is not a last resort anymore. It’s a viable option to help consumers either get into the real estate market or to stay in it and start building their real estate portfolio, if that’s what they’re looking to do.”
Micky Khaneka, a Toronto broker, noted that clients in tariff-impacted industries are particularly cautious about home purchases, as "People are nervous with the tariff talk and the uncertainty with the news."https://t.co/seXxLPSS9F
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 15, 2025
The rise and rise of private lending
Canada Mortgage and Housing Corporation (CMHC), the national housing agency, has highlighted the growing market share of alternative lending in recent times.
The growth of alternative mortgage lending outpaced that of national mortgage credit in 2024, it said in its latest residential mortgage industry report, with assets under management held by Canada’s biggest 25 mortgage investment entities jumping by 7.2% in the fourth quarter of last year.
While that means opportunity for brokers in the private and alternative spaces is on the up, Ali also highlighted their responsibilities towards clients in the sector – and underlined some of the missteps they should avoid.
The dos and don’ts of transacting in private mortgages
In Ontario, agents and brokers are required to complete an additional second-level course to transact in private mortgages.
But Ali said completion of that course is far from the only thing they need to take into consideration before they dip their toes into the private lending waters.
Interest rates are typically higher in the private and alternative lending segments, meaning the end goal should always be for borrowers using those solutions to eventually gravitate back towards the conventional space.
“Just to say that you’ve taken the private lending course and you’ve become an agent, level two does not necessarily make you an expert at that point,” Ali said. “There are so many more things to understand about the private lending space and how you actually deal with specific client scenarios.
“As a broker, you want to make sure that you’re putting your client into the best possible situation for them at that time and understanding and explaining to the client that this ideally is supposed to be a temporary solution.”
For agents and brokers, that means making sure that the client is prepared for an eventual clean exit from the space – “as opposed to placing a consumer in a private or an alternative file that they’re going to find themselves in for years and years on end,” Ali said. “That may not be the best situation for the consumer on the financial side.”
Ontario’s financial services regulator has embarked on a high-profile crackdown against unscrupulous conduct by mortgage agents and brokers in the private space, launching enforcement action against a host of different actors this year and last.
Prominent members of the industry have also spoken out about the conduct of some agents transacting in the private space across Ontario.
Executives for the Financial Services Regulatory Authority of Ontario (FSRA) have underlined the importance of agents being able to explain precisely how they communicated options to clients.
That means exploring a variety of solutions – and not just whatever’s in the broker’s best interest, Ali said. “It’s not just saying, ‘Yes, here’s your one option,’” he explained. “Spend the time to investigate what all the options are and make sure the client understands… what the plan is to exit.”
Ali is due to appear on a panel at the eagerly-anticipated Canadian Mortgage Summit, returning on September 17 at Brampton’s Pearson Convention Centre.
This year’s conference will explore ways for brokers and lenders to unlock opportunity in a shifting mortgage market – with registration still open for the event, which is free for mortgage professionals to attend.
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