In Ontario, mortgage brokering is regulated by FSRA, and only Level 2 mortgage agents and brokers can deal with private lenders. Private lenders wrote 15.8% of Ontario mortgages by number in 2024. A second mortgage carries interest, lender and broker fees, legal costs and a registration fee, and, as far as we could find, no land transfer tax, which applies when you buy.
Ontario is the largest mortgage market in the country, and it has its own rules for who may arrange a second mortgage, what the paperwork costs and what a lender can do if you fall behind. This page sets out what is different here.
Who regulates mortgages in Ontario
The Financial Services Regulatory Authority of Ontario licenses mortgage brokerages, brokers and agents. If someone offers to arrange a second mortgage on a home in Ontario, they need an FSRA licence, and you can ask for the number and check it.
Licence levels matter for private lending. Under FSRA’s rules that took effect on April 1, 2023, a Level 1 agent can deal only with financial institutions and lenders approved under the National Housing Act, while a Level 2 agent or a broker can deal with every lender, including private lenders. If your file might go to a private lender, the person arranging it should hold the right licence. Ask.
What a second mortgage costs in Ontario
The costs fall into three groups. The lender’s price is the interest, plus a lender fee. The broker’s price is the broker fee, which should be disclosed to you in writing. The closing costs are the lawyer, the appraisal, title insurance and the registration of the charge.
On registration, the Ontario government’s fee schedule lists $86.42 for registering an electronic instrument from November 2, 2026. We have not found a page that names a second mortgage specifically, so treat that as the typical electronic registration fee and let your lawyer confirm the fees for your charge.
Land transfer tax gets confused with all of this. It is a tax on buying a property. The first worked example above shows a full cost of borrowing with no such line, and the second shows what the tax would be on a purchase of the same value. Our costs and fees page lists every line you may meet.
Private lending in Ontario
Private lenders are a big part of the market here. FSRA’s 2024 private lending report counts about 65,000 private loans, 15.8% of Ontario mortgages by number and 12.5% by value. Investment Executive, summarizing the report, put the value at about $32 billion and the number share as down from 16.8% in 2023.
The share by number is bigger than the share by value, which suggests private loans are on average smaller than bank loans. That fits what second mortgages are: a smaller loan behind a larger first one.
What is happening with arrears and rates
CMHC reported that 0.32% of Ontario mortgages were 90 or more days behind in the second quarter of 2026, and it expects arrears to keep rising through mid-2027, concentrated in the Greater Toronto and Hamilton area and in southwestern Ontario.
On rates, the Bank of Canada raised its overnight target by a quarter point to 2.5% on October 28, 2026, which it described in its opening statement as the first increase since July 2023. Borrowers on variable rates and borrowers about to renew may feel it first. If you are one of them, a renewal or a refinance with a bank is worth pricing before you look at a private second mortgage.
If you have fallen behind
Ontario’s Mortgages Act sets out how a lender can sell a home under a power of sale: the default must last at least 15 days before notice, and the sale cannot happen for at least 35 days after notice. Before the sale, you can pay what is owed and stop it. Our power of sale guide goes through it in order.
Questions to ask an Ontario mortgage agent or lender
Put these to anyone who offers to arrange a second mortgage on an Ontario home, and write down the answers.
What is your FSRA licence number, and which brokerage are you licensed with?
If the lender is private, do you hold a Level 2 agent licence or a broker licence?
What will the broker fee and the lender fee be, in dollars, and will I get them in writing before I commit?
What is the term, what is due at the end, and what does an extension cost?
Who is the lender, and what happens if I miss a payment?
A professional who answers clearly and in writing is a good sign. One who avoids the questions, or presses you to sign the same day, is a reason to stop and compare.
Private lender or bank in Ontario
Start with a bank or credit union, because a regulated lender usually costs less if you qualify. If the answer is no, a private lender is the next place to look, and with private lending now close to one mortgage in six in the province by number, there is no shortage of them. The point is to compare the full cost of two or three offers, not to take the first.
Keep the paperwork
Keep the commitment letter, the disclosure statement, your lawyer’s closing report and the registered mortgage. Memory fades, and if a dispute arises those documents are what a lawyer will ask to see first. Store copies somewhere safe, away from the home.
Where to start by city
Prices, local costs and who lends vary a great deal between Toronto and a town in the north. The city pages below give local figures with their sources. The first is Toronto. More cities are added as they are written, and the form at check my options works for every Ontario city whether or not it has a page.
Land transfer tax and registration in Ontario
Ontario charges provincial land transfer tax when a property is bought, at 0.5% on the first $55,000, 1% from $55,000 to $250,000, 1.5% from $250,000 to $400,000 and 2% above $400,000, with a higher rate on the part above $2,000,000 for homes with one or two single-family residences. Toronto adds its own municipal tax on top. Registering a second mortgage is not a purchase, and we found no land transfer tax line for it.
The Ontario government lists $86.42 for registering an electronic instrument from November 2, 2026. Your lawyer will confirm which fees apply to the charge being registered, and will add their own legal fees and any title insurance.
A $100,000 second mortgage on a $900,000 Ontario home
Made-up figures except the registration fee, which is the Ontario government's listed fee for an electronic instrument from November 2, 2026. The first mortgage is $540,000. The new loan is interest only at an assumed 12% for one year, with an assumed 2% lender fee, 1.5% broker fee, $1,500 legal and $500 appraisal.
Combined loan-to-value
71.1%
$640,000 owed on a $900,000 home
Interest for a year
$12,000
Lender fee
$2,000
Broker fee
$1,500
Legal and appraisal
$2,000
Registration fee
$86.42
Cost of borrowing in year one
$17,586.42
What land transfer tax would be if you were buying that same $900,000 home
Ontario provincial land transfer tax on a $900,000 purchase, using the brackets published by the Ontario government. Toronto buyers pay a separate municipal tax as well.
0.5% on the first $55,000
$275
1% on $55,000 to $250,000
$1,950
1.5% on $250,000 to $400,000
$2,250
2% on $400,000 to $900,000
$10,000
Provincial land transfer tax on a purchase
$14,475
Questions people ask
Who regulates mortgage brokers and agents in Ontario?
The Financial Services Regulatory Authority of Ontario, known as FSRA, licenses mortgage brokerages, brokers and agents. Before you deal with anyone, ask for their licence number and check it on FSRA's public register.
What is the difference between a Level 1 and Level 2 mortgage agent?
Under FSRA's licensing rules in effect since April 1, 2023, Level 1 agents can deal only with financial institutions and approved lenders under the National Housing Act. Level 2 agents and brokers can deal with all lenders, including private lenders. Check FSRA's page for the full conditions.
Does Ontario land transfer tax apply when I take out a second mortgage?
The tax is calculated on the value of the consideration for a property purchase. We found no land transfer tax line for registering a second mortgage, so budget instead for the registration fee, legal costs, title insurance, and the lender and broker fees. Your lawyer will confirm.
Are mortgage arrears rising in Ontario?
CMHC reported that 0.32% of Ontario mortgages were 90 or more days behind in the second quarter of 2026, and expects arrears to keep rising through mid-2027, with the pressure concentrated in the Greater Toronto and Hamilton area and southwestern Ontario.
How much of the Ontario mortgage market is private lending?
FSRA's 2024 private lending report puts private lenders at 15.8% of Ontario mortgages by number and 12.5% by value, about 65,000 loans. Investment Executive, summarizing the report, says the number share was down from 16.8% the year before.
