Rates & comparisons
Prime A-Lenders vs Alternative B-Lenders vs Private Mortgages in Ontario: Rates, Fees and Disclosure
Three tiers of lender, three very different price tags. This is the full cost on the same $400,000 Niagara mortgage, what each tier will accept, how brokers are paid in each, and how to plan your way back down to the cheapest tier.
Reviewed November 13, 2026 · Indicative figures, OAC
The three tiers at a glance
Every Ontario mortgage falls into one of three tiers. Prime "A" lenders (the big banks, monolines and Ontario credit unions) offer the lowest rates to borrowers with provable income and solid credit. Alternative "B" lenders (Equitable Bank, Home Trust, Haventree Bank, Community Trust and Bridgewater Bank are examples of the category) lend to borrowers outside prime guidelines at higher rates and shorter terms. Private lenders and mortgage investment corporations (MICs) lend mainly on the property's equity, for a year at a time, at the highest cost.
- A-lender uninsured 5-yr fixed
- 4.54%
- B-lender, 1–2 yr terms
- 5.49%–6.99%
- Private / MIC, 1 yr interest-only
- 8.99%–12.99% + fees
- Broker fee on prime files
- $0
| Rate tier | 3-yr fixed | 5-yr fixed | 5-yr variable |
|---|---|---|---|
| High-ratio insuredUnder 20% down, CMHC / Sagen / Canada Guaranty | 4.39% | 4.29% | 3.65% |
| Insurable20%+ down, purchase or switch, up to $1.5M | 4.49% | 4.39% | 3.75% |
| Uninsured (conventional)Refinances, $1.5M+, most rentals | 4.64% | 4.54% | 3.95% |
| Ontario credit-union tierProvincially regulated lenders | 4.74% | 4.69% | 4.10% |
| Alternative "B" lender1–2 year terms typical, fees disclosed | 5.49%–6.99% | — | Prime + 0.50–2.00 |
| Private / MIC1-year, interest-only, fees disclosed | 8.99%–12.99% | — | — |
Indicative benchmark rates for qualified borrowers, OAC. Rates change daily and depend on credit, property, amortization and loan size. Big-6 posted 5-year fixed for penalty math: 6.09%. Not a commitment to lend.
Rates are indicative broker benchmarks for the week of November 13, 2026, on approved credit, and change daily.
What each tier accepts, and what it charges
| Factor | Prime A-lender | Alternative B-lender | Private / MIC |
|---|---|---|---|
| Typical borrower | T4 or 2+ years of proven self-employed income, good credit, within GDS 39% / TDS 44% | Self-employed on stated or bank-statement income, bruised credit, recent consumer proposal discharge, higher ratios | Short-term need: bridge, construction, power of sale, debts in arrears, heavy credit damage |
| Rate | 4.29%–4.54% (5-yr fixed) | 5.49%–6.99%, or prime + 0.50 to + 2.00 | 8.99%–12.99% |
| Term | 1–10 years, usually 5 | 1–2 years typical | 1 year, renewable at a fee |
| Payments | Amortized, up to 25 or 30 years | Amortized, commonly up to 30 years | Interest-only |
| Maximum loan-to-value | 95% insured purchase; 80% refinance | Usually lower than prime; lender-specific | About 65%–75% combined |
| Broker compensation | Lender pays 80–110 bps; no fee to you | Disclosed broker fee, about 1%, often plus a lender fee | Disclosed broker fee, about 1.5%–3%, plus a lender fee |
| Stress test | Yes (federal lenders; insured files) | Federally regulated B-lenders still apply the qualifying rate, with more flexible income and ratios | Not bound by B-20; qualifies mainly on equity and exit |
The real cost: one mortgage, three tiers
Worked example: $400,000 on a $600,000 St. Catharines home
A homeowner needs a $400,000 mortgage on a home worth $600,000, a 66.7% loan-to-value that every tier can consider. We compare one year. For the B-lender we assume 5.99% (inside this week's range), a 1% broker fee and a 1% lender fee; for the private lender, 9.99% interest-only with a 2% broker fee and a 1% lender fee. These fee levels are illustrations; your actual fees are disclosed in writing before you commit.
| Item | A-lender 4.54% | B-lender 5.99% | Private 9.99% |
|---|---|---|---|
| Monthly payment | $2,222.80 | $2,556.85 | $3,330.00 |
| Interest in year one | $17,809 | $23,473 | $39,960 |
| Broker fee | $0 | $4,000 | $8,000 |
| Lender fee | $0 | $4,000 | $4,000 |
| Total year-one cost | $17,809 | $31,473 | $51,960 |
| Cost as a % of the loan | 4.45% | 7.87% | 12.99% |
| Balance after 12 months | $391,136 | $392,791 | $400,000 |
The B-lender costs $13,664 more than prime in year one; the private mortgage costs $34,151 more and pays down nothing. Spread over a year, the private loan's fees turn a 9.99% rate into an all-in cost of almost 13%. That is why both alternative tiers should be treated as a bridge with a planned exit, not a destination.
FSRA disclosure: what you must be shown
Mortgage dealing in Ontario is regulated by FSRA under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA). Your file is handled by an FSRA-licensed mortgage agent or broker, and the brokerage's licence number, compensation and any conflicts are disclosed to you in writing before you sign anything. On B and private files, insist on seeing, in writing:
- the broker fee and the lender fee, in dollars, and whether they come off the advance or are paid separately;
- the cost of borrowing, including an annual percentage rate that folds the fees into the rate;
- the term, renewal terms and any renewal fee;
- prepayment and penalty terms (many private mortgages are closed for the term or charge a set number of months' interest);
- any relationship between the brokerage and the lender.
You will also need independent legal advice from your real estate lawyer before closing; lawyer costs on refinances are separate from the fees above.
Who ends up in each tier in Niagara
- Trades and trucking owner-operators in West Lincoln and Wainfleet whose write-offs leave low taxable income often start in B with bank-statement or stated-income programs. See self-employed mortgages.
- Households recently out of a consumer proposal or bankruptcy often qualify for B before A. See consumer proposal and bankruptcy mortgages.
- Property-tax or mortgage arrears, or a power-of-sale notice, usually need a private first or second mortgage to stop the clock. See private mortgage lenders.
- Builders and buyers needing bridge or construction money in Pelham, Lincoln and NOTL may use private funds short term. See construction mortgages.
The way back to an A-lender
- Fix what put you in the tier. Pay down revolving balances, file and pay taxes on time, and keep every payment current for 12 to 24 months.
- Use the term length. B-lender terms of one to two years exist so you can move to prime as soon as you qualify; keep the term short if the plan is to step up.
- Show income the way prime lenders read it. Self-employed borrowers may need to declare more income for two years to qualify at A rates.
- Check prime qualification before renewal. Run the numbers on the affordability and stress test calculator 120 to 150 days out.
- Price the move. Moving the $400,000 example from 5.99% to 4.54% cuts the payment by $334.05 a month.
Frequently asked questions
What is the difference between an A-lender and a B-lender?
A-lenders (banks, monolines and credit unions) offer the lowest rates to borrowers who meet standard income, credit and ratio guidelines. B-lenders accept more flexible income documentation, weaker credit and higher ratios, at rates of about 5.49%–6.99% this week and usually for one- to two-year terms, often with a broker fee and a lender fee.
How much does a private mortgage really cost in Ontario?
Private mortgages typically run 8.99%–12.99% interest-only for a one-year term, plus a broker fee of about 1.5%–3% and usually a lender fee. On $400,000 at 9.99% with 3% in total fees, year-one cost is about $51,960, or almost 13% of the loan.
Do I pay a broker fee on a regular bank or credit-union mortgage?
No. On prime files the lender pays the brokerage a finder's fee, typically 80–110 basis points of the loan, and there is no fee to the borrower. Broker fees apply on alternative and private files and are always disclosed in writing before you commit.
Do B-lenders use the stress test?
B-lenders that are federally regulated still qualify borrowers at the federal minimum qualifying rate, but they may accept higher debt ratios and alternative proof of income. Private lenders and MICs are not bound by OSFI's B-20 guideline and lend mainly on equity and a credible exit plan.
How long should I stay with a B-lender?
Only as long as it takes to qualify for prime, usually one or two terms of one to two years. On a $400,000 mortgage, moving from a 5.99% B rate to a 4.54% prime rate lowers the payment by about $334 a month, so the exit plan matters from day one.
Pre-approval & rate review
Get your Niagara mortgage numbers checked
Tell us where you are buying or what you owe. We reply by email, usually within one business day, with options from across the lender tiers.
- A licensed advisor reviews your numbers against A-lenders, Ontario credit unions and alternative lenders.
- Rate holds of up to 120 days on purchases and renewals (lender-dependent).
- On prime files the lender pays the brokerage, so there is no fee to you; any fee on alternative or private files is disclosed in writing first.
- Nothing goes to a lender or credit bureau until you say so.
Prefer email? Write to hello@mortgageniagara.com.