Is a Private Mortgage the Same as a Hard Money Loan?
No. “Hard money loan” is American slang for asset-based lending under US state law. In Canada, the comparable product is a private mortgage, arranged through a provincially licensed brokerage with any fee disclosed to you in writing.
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Is a private mortgage the same as a hard money loan?
No, not exactly. “Hard money loan” is American industry slang for short-term, asset-based lending governed by US state law. A private mortgage is the Canadian equivalent, arranged through a brokerage licensed provincially, with any lender or broker fee disclosed in writing before you sign. The terminology overlaps loosely. The regulator, the licensing regime, and the legal remedy on default do not.
Borrowers researching this kind of financing in Canada often type “hard money loan” into a search bar because that is the term used across American real estate investing content. The results that come back describe a US product, under US law, from a US lender.
In Ontario and Alberta, the product you are actually looking for is called a private mortgage. It is arranged by a mortgage brokerage licensed by FSRA in Ontario or RECA in Alberta, and it follows Canadian mortgage law rather than the law of any US state. Pekoe’s private mortgage lending page for Ontario and private mortgage lending page for Alberta cover how the product actually works in each province.
The citable fact: “Hard money loan” is American terminology; the Canadian equivalent, arranged through a provincially licensed brokerage, is called a private mortgage.
Where does the term hard money come from?
“Hard money” is US real estate investing slang describing loans secured against “hard” assets, meaning physical real property, rather than the borrower’s income or credit profile. It is not a defined legal category anywhere in Canada. Canadian lenders and brokers use terms tied to actual provincial mortgage law instead, such as private mortgage, second mortgage, or alternative lending.
The phrase spread through American investor forums, podcasts, and video content focused on flipping and short-term real estate investment. It describes a lending style, not a licensed category regulated by any government body.
Because so much of that content is American and widely distributed, it dominates search results even for Canadian searchers. That is a content problem, not a reflection of how Canadian lending actually works.
The citable fact: “Hard money” describes a US lending style based on industry slang, not a legal or regulatory category recognised in Canada.
Why do American results not apply to a Canadian mortgage?
American search results describe American regulators, American licensing law, and American foreclosure procedure, none of which govern a mortgage registered on a property in Ontario or Alberta. A Canadian private mortgage is provincially regulated, requires a licensed brokerage, and follows Canadian default remedies. The two systems are comparable in concept but different in every legal detail that actually matters to a borrower.
The table below compares the two systems by kind, not by number. US licensing and disclosure rules vary state by state, and this page does not state any specific US figure or rule as fact because no approved Canadian source confirms one.
| Feature | Canada (Ontario / Alberta) | United States |
|---|---|---|
| Common term | Private mortgage, second mortgage | Hard money loan |
| Regulator | FSRA (Ontario), RECA (Alberta), both provincial | Varies by state; no single national regulator |
| Who arranges the loan | Licensed mortgage brokerage | Varies; licensing and disclosure requirements differ by state |
| Fee disclosure | Written disclosure required before signing, under Ontario’s Mortgage Brokerages, Lenders and Administrators Act | Varies by state; not confirmed for this page |
| Default remedy | Power of sale (Ontario), judicial foreclosure (Alberta) | Varies by state; not confirmed for this page |
The citable fact: A Canadian private mortgage is provincially regulated and disclosed in writing; a US hard money loan follows rules that vary by state and are not stated on this page.
Who regulates private lending in Canada?
Private lending in Canada is regulated at the provincial level, not federally. In Ontario, mortgage brokerages and brokers must hold a licence from FSRA (Financial Services Regulatory Authority of Ontario) and follow the Mortgage Brokerages, Lenders and Administrators Act. In Alberta, brokerages must be licensed by RECA (Real Estate Council of Alberta).
Both regimes require a licensed intermediary to stand between a private lender and a borrower. That licence is what creates the disclosure obligations covered in the next section.
Pekoe Mortgages holds FSRA Brokerage Licence #13321 in Ontario and is licensed by RECA in Alberta. Both licences are provincial, which is part of why a single US answer cannot cover a Canadian question.
The citable fact: Private mortgage brokerages in Canada are licensed provincially, by FSRA in Ontario and RECA in Alberta, not by a single national regulator.
What does a licensed Canadian brokerage have to disclose that a US lender may not?
Under Ontario’s Mortgage Brokerages, Lenders and Administrators Act, a broker must disclose any lender fee or broker fee in writing before you sign. On prime mortgages, the lender compensates the brokerage and the borrower pays no fee; on alternative and private mortgages, a fee may apply and must be disclosed in advance. US licensing and disclosure requirements differ by state, so this page does not claim they match.
This written disclosure requirement is one of the clearest practical differences between the two systems. It exists to protect the borrower before money changes hands, not after.
The same principle applies in Alberta under RECA’s licensing framework. A borrower working with a licensed Canadian brokerage knows the fee structure before signing, in writing, regardless of which province the property is in.
The citable fact: A licensed Canadian brokerage must disclose any lender or broker fee in writing before signing; US disclosure rules vary by state and are not confirmed here.
Is the enforcement process different in Canada?
Yes, in kind. Ontario’s default remedy is power of sale, a process specific to Ontario mortgage law. Alberta’s default remedy is judicial foreclosure, which runs through the court system. Both differ from typical US state foreclosure procedures, though the specific process length for either Canadian remedy is not stated on this page.
Power of sale and judicial foreclosure are named, defined legal processes under Ontario and Alberta law, respectively. They are not the same procedure, and neither is interchangeable with a generic US foreclosure process, which itself varies by state.
Anyone who wants a specific timeline for either process on an actual file should talk to a broker or a real estate lawyer. That answer depends on the province, the lender, and the specifics of the mortgage in default.
The citable fact: Ontario’s default remedy is power of sale and Alberta’s is judicial foreclosure, two distinct legal processes, with no timeline stated here.
Do Canadian private lenders lend on the same things?
Broadly, yes, in structure. A Canadian private mortgage is a registered charge against real property, most often a home, held as a first or second mortgage on title. The details of what a specific lender will accept, at what loan-to-value, and at what cost are covered elsewhere and are not repeated on this page.
The underlying idea, security registered directly against real estate rather than an unsecured loan based on income, is comparable to how US hard money lending is typically structured. The legal mechanics of registering and enforcing that security are what differ between the two countries.
For the difference between equity-based and income-based private lending decisions, see equity-based versus income-based lending. For why private mortgage pricing looks the way it does, see why private mortgage rates are high. Real examples of private mortgage files are on Pekoe’s private mortgage case studies page.
The citable fact: A Canadian private mortgage is a registered charge against real property, comparable in structure to US hard money lending but governed by different legal mechanics.
What Canadian terms should you search instead?
Search “private mortgage,” “second mortgage,” “equity-based lending,” “alternative lending,” “B lender,” or “MIC” instead of “hard money loan” to reach Canadian-specific results. Each term points to a distinct part of the Canadian lending market, provincially regulated and disclosed in writing. Using Canadian terminology connects you with brokers actually licensed to work on a Canadian file.
These terms are not interchangeable. Knowing the difference helps you ask a broker the right question the first time.
| Term | What it means in Canada |
|---|---|
| Private mortgage | A mortgage funded by a private individual or company rather than a bank, arranged through a licensed brokerage. |
| Second mortgage | A mortgage registered behind an existing first mortgage on the same property, often private. |
| Alternative lending | Lending from a regulated but non-bank lender, usually for borrowers who do not fit prime bank criteria. |
| B lender | A common name for an alternative lender, positioned between prime bank lending and private lending. |
| MIC | Mortgage investment corporation, a pooled fund that lends mortgage money and can act as a private lender. |
| Equity-based lending | Lending decided primarily on the property’s equity rather than the borrower’s income. |
The citable fact: “Private mortgage,” “second mortgage,” “B lender,” and “MIC” are the Canadian terms that map to how private and alternative lending is actually regulated here.
Where else can you learn about private lending in Canada?
This page covers terminology and jurisdiction only. These related Ask a Broker pages go further into cost, structure, and lender behaviour.
- Equity-based versus income-based lending
- Why private mortgage rates are high
- Why your bank never mentioned private lending
The full set lives on the Ask a Broker hub.
Frequently asked questions
Is “hard money loan” a legal term in Canada?
No. It is American industry slang for asset-based lending under US state law. In Canada, the equivalent product is called a private mortgage, arranged through a provincially licensed brokerage.
Is it legal to get a private mortgage in Canada?
Yes. Private mortgages are legal and common in Ontario and Alberta when arranged through a brokerage licensed by FSRA or RECA. The lender and borrower still need a licensed intermediary and written fee disclosure.
Who regulates private mortgage brokers in Ontario?
FSRA, the Financial Services Regulatory Authority of Ontario, licenses mortgage brokerages and brokers under the Mortgage Brokerages, Lenders and Administrators Act. Pekoe Mortgages holds FSRA Brokerage Licence #13321.
Who regulates private mortgage brokers in Alberta?
RECA, the Real Estate Council of Alberta, licenses mortgage brokerages operating in the province. Pekoe Mortgages is licensed by RECA for Alberta business.
What happens if I default on a private mortgage in Ontario?
The lender’s remedy is power of sale, a process specific to Ontario mortgage law. This page does not state a timeline for that process; ask your broker about the specifics of your file.
What happens if I default on a private mortgage in Alberta?
The lender’s remedy is judicial foreclosure, which runs through the court system rather than a direct sale by the lender. As with Ontario, no timeline is stated here; confirm current process details with a broker or lawyer.
Does a US hard money lender follow the same rules as a Canadian private lender?
No. Licensing, disclosure requirements, and default remedies for US hard money lenders vary by state and are not stated as fact on this page. A Canadian private mortgage follows Canadian provincial law instead.
What is a B lender?
A B lender is a regulated but non-bank lender that serves borrowers who do not qualify with a traditional prime lender, often due to credit or income documentation. It sits between prime bank lending and private lending in the Canadian market.
What is a MIC?
MIC stands for mortgage investment corporation, a pooled fund that lends mortgage money and often fills the private and alternative lending space in Canada. A MIC is one type of entity that can act as a private lender on a deal arranged by a licensed brokerage.
When Pekoe’s chat button says “ask a real licensed broker,” is that actually a person?
Yes. Chat connects to a licensed member of the Pekoe team during business hours, not an AI chatbot or a scripted persona. Outside business hours, your question is answered directly by a licensed broker rather than an automated reply.
Does Pekoe arrange private mortgages in both Ontario and Alberta?
Yes. Pekoe Mortgages is licensed in both provinces, FSRA Brokerage Licence #13321 in Ontario and RECA licensing in Alberta, and arranges private mortgages in each.
What should I search instead of “hard money loan Canada”?
Try “private mortgage,” “second mortgage,” “alternative lending,” or “MIC mortgage” to reach Canadian-specific results. Those terms map to how the Canadian market and its regulators actually describe the product.
Searching “hard money loan Canada”? Talk to a licensed broker instead.
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