Private mortgage awareness gap persists, report finds
While 67 per cent of respondents said they faced no obstacles in securing a mortgage, the remaining 33 per cent cited limited down payment savings (10 per cent), high property prices (eight per cent), self-employment or irregular income (seven per cent), mortgage stress test requirements (three per cent), and credit history (two per cent) as the most common hurdles.
Alternative lending which includes loans provided by private lenders or mortgage investment corporations (MICs) rather than banks or credit unions, is typically used as a short-term bridge toward conventional financing. It often comes with higher interest rates and fees, but places greater weight on property equity and the borrower’s overall plan than on income documentation or credit score.
“Alternative lending can act as a bridge towards conventional financing while they stabilize their financial situation,” Jaskolka said. “This doesn’t mean it’s the right solution for every borrower, but it shows that these solutions should be assessed based on someone’s circumstances rather than reputation alone.”
For brokers whose clients are increasingly gig workers, self-employed, or earning income outside traditional employment structures, the findings suggest that the private mortgage conversation may be overdue. Given that more than half of those who used alternative lending reported a positive long-term outcome, the data makes a case for brokers to become more fluent in the space, not to advocate for private mortgages by default, but to ensure clients aren’t ruling them out based on reputation alone.
