Short answer
Yes, private financing can close on a timeline a bank’s underwriting cycle cannot match, because the decision rests on the property and the equity, not a full income and credit adjudication. It costs more than a bank mortgage, and makes sense only when the deadline is real and no conventional option can be arranged in time.
Why a firm closing date can outrun a bank
A firm purchase carries no financing condition, so the closing date does not move for you if approval takes longer than expected. Bank underwriting has its own queue, its own documentation cycle, and its own conditions that need to be cleared before funds are released, and none of that is designed around your specific deadline.
Self-employment income that needs verifying, a recent job change, a property type that needs a second look, or simply a lender operating at capacity can all push a conventional approval past the date you need to close.
How a private lender closes faster
A private lender’s underwriting is narrower by design. It is largely an equity decision: what the property is worth, how much cushion sits behind the loan, and whether the position is marketable if something goes wrong.
Fewer conditions means fewer places for a file to stall. That is the entire reason these files can move at a pace conventional lending is not built for, and it is also why the cost is higher.
What it costs
More than a bank, in more places than the rate. Expect an interest rate above conventional pricing, a lender fee and usually a broker fee each calculated as a percentage of the loan, legal fees on both sides, and an appraisal, which itself needs to be booked and completed quickly enough to still meet your date.
Read the full guide for Private Mortgage Lending in Alberta or Private Mortgage Lending in Ontario, where typical ranges for rates, lender fees, broker fees, loan-to-value, and term are set out in full. Every figure varies by file and none of them is a quote.
This is not the same tool as bridge financing
Do not confuse this with bridge financing, which typically covers the gap between the sale of one property and the purchase of another when the closing dates do not line up. A fast-close private mortgage is a full loan against the property you are buying, used because conventional approval will not land in time, not a short gap loan between two closings on properties you already own or are selling.
Have the exit ready before you commit
A fast close solves the closing date. It does not solve the cost long term.
Before you sign, know the realistic path back to conventional financing, whether that is a pending income document, a credit repair timeline, or simply time passing on a property that will appraise normally once it is not under deadline pressure. If you cannot describe that path, ask your broker to walk through it with you before closing day, not after.
Frequently asked questions
How much faster is private financing than a bank approval?
There is no fixed number, it depends on the lender, the file, and how quickly the appraisal and legal work can be booked. Ask your broker for a realistic timeline against your specific closing date before you rely on it.
Can I switch out of a fast-close private mortgage once I have closed?
Often yes, once the specific issue that caused the delay is resolved, a completed document, a repaired score, or simply time. Start that conversation with your broker well before the private term ends.
Does a fast private closing skip the appraisal?
No. An appraisal is still required, it simply needs to be scheduled and completed on a timeline that respects your closing date. Book it as early as possible once you know private financing is the route.
Is private financing my only option if a bank cannot close in time?
Not necessarily. A B-lender or an extension negotiated directly with the seller may also work, and both are usually cheaper than private financing. Ask your broker to check those first, while keeping private financing available as the backup that actually closes.
