A Lending, B Lending, and Private Mortgages – What's the Difference?
If you're applying for a mortgage in British Columbia, you may come across terms like A lender, B lender, or private mortgage. These aren’t just industry jargon—they represent very different types of lending options, each with its own set of guidelines, rates, and approval criteria.
As your trusted mortgage broker, my job is to help you understand these options and match you with the best fit for your financial situation. Let’s break it all down.
🅰️ A Lenders: The Big Banks, Credit Unions
A lenders are the traditional mortgage providers—think Canada’s major banks (like RBC, TD, or BMO) and large credit unions.
✅ Best For:
Borrowers with strong credit scores
Stable, verifiable income
Low debt levels
📋 Typical Features:
The lowest interest rates
CMHC-insured mortgages available (if under 20% down)
Strict adherence to the mortgage stress test
In-depth income and credit verification
📌 Good to Know:
A lenders offer the best terms if you qualify, but they are less flexible when it comes to unique financial situations.
🅱️ B Lenders / Alternative Lenders
B lenders are financial institutions that cater to borrowers who don’t quite fit the A lender box. These are often monoline lenders or trust companies.
✅ Best For:
Self-employed individuals with non-traditional income
Those with bruised credit or past financial issues
Borrowers carrying higher debt loads
Recent immigrants or newcomers to Canada
People who don't pass the stress test, but can afford real-world payments
📋 Typical Features:
More flexible approval criteria
Slightly higher interest rates than A lenders
May require a larger down payment (often 20%+)
Often come with lender fees
📌 Good to Know:
B lenders are a great bridge for clients working toward qualifying with an A lender in the future. With the right planning, a B lender can be a stepping stone.
🔒 Private Mortgages
Private mortgages are offered by individual investors or private lending companies rather than banks or financial institutions. These are asset-based loans—more focused on the value of the property than your income or credit.
✅ Best For:
Urgent financing needs (e.g. fast closings, short-term solutions)
Poor or no credit history
Borrowers who have been turned down elsewhere
Properties that don’t meet traditional lender guidelines
📋 Typical Features:
Higher interest rates
Short terms (usually 1–2 years)
Lender and broker fees apply
Focused on equity in the property, not income
📌 Good to Know:
Private mortgages are often temporary solutions, best used to solve an immediate problem or take advantage of a short-term opportunity. They require an exit strategy, which I can help you build.
Final Thoughts From Me
The mortgage landscape in BC is far from one-size-fits-all. Whether you're buying your first home, refinancing, or dealing with a unique financial situation, there’s likely a lending solution that fits - it’s just about knowing where to look.
As a professional mortgage broker, I work with A, B, and private lenders across the province and country. My job is to match you with the right lender for your needs, not just the lowest rate—because in many cases, flexibility, timing, and approval are just as important.