What is a private refinance?
A private refinance replaces or adds to existing mortgage debt using a loan from a private lender, secured on your home's equity. It's commonly used to consolidate high-interest debt, clear arrears or tax debt, release equity for a business or renovation, or replace a maturing mortgage that a bank won't renew.
Situations Meshesha handles most often
Second mortgages and equity take-outs
A private second mortgage sits behind your existing first mortgage. It keeps a low-rate first in place and avoids a large prepayment penalty, with the combined loan-to-value generally kept within roughly 75%–80% for GTA freehold homes.
Debt consolidation
Rolling unsecured debt into a short-term secured loan can lower total monthly payments and stabilize credit, setting up a refinance to a lower-cost lender once your credit recovers.
Arrears, property-tax debt and CRA balances
Private lenders can look past recent missed payments when equity is strong. Speed matters here: the earlier the call, the more options remain.
Renewing or replacing a maturing private mortgage
Private mortgages typically mature in 12 months. Meshesha reviews every file he places ahead of maturity — renew, move lenders, or graduate to a B or bank lender.
| Private first (replace) | Private second (add) | |
|---|---|---|
| Existing mortgage | Paid out | Stays in place |
| Bank penalty | Triggered if mid-term | Avoided |
| Rate (general range) | Lower of the two | Higher, reflects 2nd position |
| Best when | First is maturing / in default | First has a good rate & big penalty |
| Exit | Refinance whole balance | Pay out 2nd or blend at bank renewal |
The renewal checklist Meshesha uses
- 90 days out: pull updated credit and confirm payment history.
- Estimate current value and recompute loan-to-value.
- Check whether the original exit (bank refinance, sale, completion) is now achievable.
- Request renewal terms from the current lender and compare with alternatives.
- Decide 30+ days before maturity — never at the last minute.
Check your exit before you start
Enter what you'll owe at the end of the private term to see whether a refinance to a conventional lender is realistic.