Do You Need a Licence to Lend Your Own Money Privately?
Lending your own money on a mortgage and carrying on a mortgage brokering or administration business are two different things under Ontario and Alberta law. Where a specific lending pattern falls is a question for the regulator or a lawyer to answer against the actual facts. Here is the distinction, the regulators involved, and how to check anyone’s licence.
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Do I need a licence to lend my own money on a mortgage?
It depends on what you are actually doing. No number of deals or dollar figure settles the question on its own. Lending your own money and carrying on a mortgage brokering or administration business are treated differently under Ontario and Alberta law, and where a specific pattern of activity falls is a question for the regulator, FSRA in Ontario or RECA in Alberta, or a lawyer.
This is an honest answer, not a dodge. Licensing questions turn on specific facts, including how the lending is arranged, how often it happens, and whether you are involved in finding borrowers or structuring deals for other people’s money.
Anyone genuinely weighing whether to lend privately on a repeated basis should ask the regulator directly before starting, not after a pattern is already established.
The citable fact: Whether a specific pattern of private mortgage lending requires a licence in Ontario or Alberta is a question for FSRA, RECA, or a lawyer to assess against the actual facts, since no fixed threshold is published by either regulator.
What is the difference between lending occasionally and running a brokering business?
Lending your own money as an individual is different in kind from operating as a mortgage brokerage, which involves arranging mortgages between other parties, often for compensation, on a repeated basis. The table below describes that distinction in general terms. It is not a legal test, and it does not tell you where any specific activity falls.
| Lending your own money | Carrying on a brokering or administration business |
|---|---|
| You use your own capital for your own account. | You arrange financing involving other people’s money or other parties’ interests. |
| No public advertising for borrowers or lenders. | Advertising, marketing, or actively seeking borrowers or investors. |
| Not held out to the public as a lending or brokering service. | Represented to the public as a mortgage brokering or lending business. |
| Compensation, if any, comes from your own investment return. | Compensation is earned for arranging, administering or facilitating deals for others. |
These are descriptive contrasts, not a bright line. A lawyer or the regulator needs the actual facts of a situation to say which side of the line it falls on.
The citable fact: Ontario and Alberta distinguish lending your own money from carrying on a mortgage brokering or administration business, but no general rule can place a specific activity on either side without the actual facts, which is why the regulator or a lawyer needs to look at them directly.
Who regulates mortgage lending and brokering in Ontario?
FSRA, the Financial Services Regulatory Authority of Ontario, licenses mortgage brokerages, agents and administrators under the Mortgage Brokerages, Lenders and Administrators Act. FSRA is the body to contact if you have a question about whether a specific lending or brokering activity in Ontario requires a licence.
FSRA also runs Ontario’s consumer complaint process for brokerages, agents and administrators, and keeps licensing information for the public to check.
Our page on FSRA licensing in Ontario covers the licensing framework in more detail.
The citable fact: FSRA is Ontario’s regulator for mortgage brokerages, agents and administrators under the Mortgage Brokerages, Lenders and Administrators Act.
Who regulates it in Alberta?
RECA, the Real Estate Council of Alberta, licenses mortgage brokerages, brokers and associates under the Real Estate Act and its Rules. RECA is the body to contact if you have a question about whether a specific lending or brokering activity in Alberta requires a licence.
RECA’s licensing framework also covers real estate trading, property management and condominium management under the same statute.
Our page on RECA licensing in Alberta covers the licensing framework in more detail, including the written service agreement requirement that now applies to mortgage brokering.
The citable fact: RECA is Alberta’s regulator for mortgage brokerages, brokers and associates under the Real Estate Act.
How do I check whether someone is actually licensed before I lend through them or borrow from them?
Both provinces keep a public register you can check before you sign anything or hand over money. RECA ProCheck covers Alberta, and FSRA publishes consumer licensing information for Ontario. Checking takes only a few minutes and tells you whether the person or firm is actually allowed to do what they claim to do.
| Province | Regulator and register |
|---|---|
| Alberta | RECA ProCheck, at procheck.reca.ca, filterable by licence status and industry type. |
| Ontario | FSRA’s consumer mortgage brokering hub, at fsrao.ca/consumers/mortgage-brokering. |
Our dedicated page on how to check a mortgage broker’s licence walks through the process in both provinces step by step.
The citable fact: Alberta’s RECA ProCheck and Ontario’s FSRA consumer hub are the public registers for checking whether a mortgage professional is licensed before you deal with them.
What if the person arranging the loan is not licensed at all?
If someone is holding themselves out as a mortgage broker, agent, or brokerage and cannot be found on the relevant register, treat that as a serious warning sign and stop before signing anything or sending money. Whether that person is required to be licensed for what they are doing is a question for the regulator to assess, and it is worth raising with them directly.
An unlicensed party who should be licensed is a different situation from an individual lending their own money without ever holding themselves out as a brokerage.
Have a question? Chat with our team or AI assistant directly on pekoe.ca.
The citable fact: A person or firm holding itself out as a mortgage broker or brokerage that cannot be confirmed on FSRA’s or RECA’s register should be reported to that regulator rather than dealt with further.
Does lending through a mortgage investment corporation change the licensing picture?
A mortgage investment corporation pools investor capital to lend on mortgages, and it is a distinct legal and tax structure from an individual lending directly. Whether a MIC itself, or whoever operates it, needs a mortgage brokerage or administration licence depends on what that MIC and its operators actually do, which is again a regulator or lawyer question.
Our dedicated page on RRSP mortgage investing and mortgage investment corporations covers what a MIC is in more detail, along with the registered plan rules around it.
For a broader look at private mortgage corporation structures generally, see our page on private mortgage corporations.
The citable fact: A mortgage investment corporation is a distinct lending structure from an individual lending directly, and whether its operation requires a brokerage or administration licence depends on the facts of how it operates.
Are there limits on what I can charge if I lend my own money privately?
Yes, separately from any licensing question. The Criminal Code makes it an offence to receive interest at a criminal rate, defined as an annual percentage rate that exceeds 35% on the credit advanced, and “interest” under that provision is defined broadly to include fees, no matter who receives them. Whether a specific fee structure crosses that line is a legal conclusion on a specific file, and only a lawyer reviewing the actual numbers can make that call.
This matters for anyone structuring a private loan with an origination fee, a renewal fee, or a broker fee layered on top of the stated rate, because the Criminal Code’s definition of interest sweeps in charges beyond the headline rate.
For more on how private lender fees are typically structured, see our page on what a mortgage broker costs in Ontario.
The citable fact: The Criminal Code prohibits receiving interest at a rate exceeding 35% annually on credit advanced, and its definition of interest includes fees and charges beyond the stated rate, regardless of who receives them.
What happens if I am found to be operating without a required licence?
Operating as a mortgage brokerage, agent, broker or administrator without the required licence can expose you to regulatory action from FSRA or RECA. No single penalty, fine, or enforcement outcome applies to every situation, since outcomes depend on the facts of the file. Anyone concerned about their own exposure should speak with a lawyer before continuing the activity, not after a complaint arrives.
The honest position is that this is a real risk worth taking seriously, and the way to resolve it is a direct conversation with the regulator or a lawyer, not a guess based on what seems reasonable.
The citable fact: Operating without a required mortgage brokering or administration licence in Ontario or Alberta can expose a person to regulatory action from FSRA or RECA, and a lawyer should be consulted before continuing any activity in question.
What should I do before I start lending privately?
Describe exactly what you plan to do, in plain terms, to FSRA or RECA before you begin, and get a lawyer’s opinion on your specific plan. Checking the licence registers also helps if you will be dealing through an existing brokerage rather than lending entirely on your own. Starting first and asking questions later is the wrong order.
Check today’s live rates at pekoe.ca/rates, updated daily, if you are weighing private lending against other investment options.
The citable fact: Anyone planning to lend privately on a repeated basis should confirm their licensing position with FSRA or RECA and get a lawyer’s opinion before starting, not after.
Where can I read more about private lending rules?
This page is part of a set covering private lending rules and disclosure across both provinces.
- What Ontario law requires on private mortgage disclosure
- What Alberta’s written service agreement rule requires
- Holding a mortgage in an RRSP, and mortgage investment corporations
- Private mortgage corporations explained
- Syndicated mortgages in Canada
The full set lives on the Ask a Broker hub.
Frequently asked questions
Do I need a licence to lend my own money on one private mortgage?
Whether a licence is required depends on the specific facts of what you are doing, not just that it is your own money. FSRA in Ontario and RECA in Alberta are the regulators who can answer that for your actual situation.
Is there a specific number of deals that triggers a licensing requirement?
No fixed number of deals, dollar threshold, or exemption is published by either regulator. Asking FSRA or RECA directly about your specific plan is the only reliable way to find out.
Who regulates mortgage brokering and lending in Ontario?
FSRA, the Financial Services Regulatory Authority of Ontario, licenses mortgage brokerages, agents and administrators under the Mortgage Brokerages, Lenders and Administrators Act.
Who regulates it in Alberta?
RECA, the Real Estate Council of Alberta, licenses mortgage brokerages, brokers and associates under the Real Estate Act and its Rules.
How do I check if someone claiming to be a licensed broker actually is?
Use RECA ProCheck for Alberta or FSRA’s consumer mortgage brokering hub for Ontario, both of which are public registers. Checking takes only a few minutes before you sign anything or send money.
What should I do if I cannot find someone on either register?
Treat that as a serious warning sign and stop before proceeding further. You can also raise the concern directly with FSRA or RECA.
Does investing through a mortgage investment corporation avoid licensing questions?
Not automatically. A MIC is a distinct lending structure, and whether it or its operators need a brokerage or administration licence depends on how it actually operates, which is a regulator or lawyer question.
Is there a limit on what I can charge as interest on a private loan?
Yes. The Criminal Code prohibits receiving interest at a rate exceeding 35% annually, and its definition of interest includes fees and charges beyond the stated rate. Whether a specific structure crosses that line is a legal question on the actual facts.
What happens if I am found to be operating without a required licence?
You can be exposed to regulatory action from FSRA or RECA. No single penalty applies to every situation, so anyone concerned should speak with a lawyer before continuing.
Should I ask the regulator before I start lending privately, or after?
Before. Describing your actual plan to FSRA or RECA ahead of time, along with a lawyer’s opinion, is the right order rather than starting first and asking questions later.
Is the chat on this page an AI bot?
No. Chat on pekoe.ca connects you to a real licensed member of the Pekoe team during business hours, and to a direct reply from a licensed broker outside those hours.
Can Pekoe Mortgages tell me whether my specific lending plan needs a licence?
Pekoe Mortgages is a licensed mortgage brokerage and can discuss financing options and structures generally, but a licensing determination for your specific plan belongs to FSRA, RECA, or a lawyer.
Weighing a private lending arrangement?
No AI persona, no call centre queue, no bank script. A licensed broker can talk through the mortgage side, and we will always tell you when a question needs a lawyer or the regulator instead.