Hard money lender Alberta options can provide short-term financing when you are unable to qualify with a bank or credit union. A hard money lender Alberta focuses on equity instead of income, making these loans suitable for borrowers who do not meet traditional lending requirements. These loans are commonly used for fix and flip projects, bridge financing, land purchases, or urgent situations such as foreclosure prevention.
Approval through a hard money lender in Alberta is based primarily on property value and loan-to-value ratio rather than credit score or income. Most hard money lenders in Alberta lend up to 75 to 80 percent loan-to-value. Interest rates are higher than conventional mortgages, and terms are short, typically 6 to 12 months. A realistic exit strategy is non-negotiable before signing. Hard money is a bridge, not a destination.
Disclaimer: Interest rates and fees are subject to change and vary based on current market conditions. LendToday.ca is not liable for any variance in rate and fee offers. All rate and fee offers depend on the application, supporting documents, and home value.
What Is a Hard Money Lender and How Does It Work?
A hard money lender is a private individual or company that provides short-term mortgage financing secured against real estate. Unlike banks, which evaluate the borrower heavily, private lenders evaluate the asset first.
Asset-Based Lending Explained
Approval hinges on four factors: the current market value of the property, the existing mortgage balance, the resulting loan-to-value ratio, and the property’s marketability, meaning how easily it could be sold if the borrower defaults.
If your home is worth $600,000 and you owe $300,000, you have $300,000 in equity. At an 80% LTV ceiling, a lender could potentially advance up to $480,000 in total secured debt, meaning you could borrow up to $180,000 on top of your existing mortgage (minus fees).
How Private Mortgages Differ From Bank Mortgages
Banks rely on income verification, debt service ratios, credit scores, and stress tests. Hard money lenders set most of that aside and focus on equity, property condition, and exit strategy. The loan structure itself is also different; most private mortgages are interest-only, meaning monthly payments cover only interest, and the full principal is due at maturity. This keeps monthly obligations lower but requires a clear repayment plan.
Who Qualifies With a Hard Money Lender in Alberta?
Credit Score
Credit flexibility is one of the primary reasons borrowers turn to private lenders. Most hard money lenders in Alberta will consider applications with any credit score. Past collections, missed payments, consumer proposals, and even recent bankruptcies may be acceptable, provided there is enough equity in the property to offset the risk. That said, a significantly damaged credit profile may affect the rate offered or the maximum LTV a lender is willing to approve.
Loan-to-Value Requirements
Most Alberta private lenders cap exposure at 75–80% LTV, calculated by dividing total secured debt against the property by its appraised value. Properties in smaller towns, rural areas, or markets with thin sales volume may face a lower LTV ceiling, sometimes 65%, due to reduced marketability. Location matters significantly in how lenders assess risk.
Income and Documentation
Income verification is lighter than with banks, but it is not absent. Lenders need reasonable confidence that you can service the interest payments during the loan term. Expect to provide a current mortgage statement, a recent property appraisal (ordered or approved by the lender), and a summary of your financial situation. A lawyer must be involved for closing in Alberta, as the mortgage must be registered on title in accordance with provincial rules.
Common Use Cases
Fix and Flip
Investors purchasing distressed properties to renovate and resell are among the most common hard money borrowers. The appeal is speed; banks can take 30–45 days to fund, while a private lender can often close in 7–14 days. In competitive Calgary or Edmonton markets, that gap can mean losing a deal. The short loan term also aligns naturally with a typical renovation and resale timeline of 6–12 months.
Bridge Financing
Bridge loans allow a homeowner to purchase a new property before their existing home has sold. Rather than losing a purchase opportunity or being forced to sell under pressure, a short-term private mortgage provides the liquidity needed to carry both properties temporarily. Once the existing home sells, the bridge loan is repaid.
Land, Construction, and Infill Development
Conventional lenders are conservative with vacant land, rural parcels, and construction projects — particularly at early stages before permits or pre-sales are in place. Private lenders regularly fill this gap, funding land acquisitions or providing short-term construction financing when bank approval isn’t yet achievable.
Emergency and Time-Sensitive Situations
Hard money lending is often used to stop or delay enforcement actions. If a homeowner is facing a power of sale, foreclosure, tax arrears, or has missed mortgage payments and is accumulating penalties, a private lender can move quickly to discharge the threatening debt and buy time. The key caution here: waiting too long erodes equity, and if LTV climbs too high, even private lenders cannot help.
The Exit Strategy
This is the most important part of any hard money arrangement. Because terms are short and renewal is not guaranteed, every borrower must have a credible plan for repaying the loan at maturity before they sign.
Refinancing back to conventional financing is the most common exit. This typically involves using the loan term to improve credit, reduce other debts, stabilize income, or simply allow time to pass after a negative credit event. At maturity, the borrower qualifies with a bank or credit union and pays off the private mortgage.
Sale of the property is the exit for investors or homeowners who intend to move. This requires realistic pricing expectations and an honest assessment of market conditions. Do not assume best-case sale prices when planning a hard money exit.
Adding a co-borrower or guarantor can improve the refinance path if income or credit is the barrier to returning to institutional lending.
If none of these exits are achievable within the loan term, hard money is not the right solution. A lender whose loan matures with no repayment available will pursue enforcement, and borrowers in that position have limited options.
Costs and Fees to Understand
Hard money loans are more expensive than conventional mortgages, and borrowers need to account for all-in costs before deciding whether the financing makes sense.
Interest rates in Alberta typically range from 9% to 14% annually, depending on LTV, property type, and borrower risk. These are usually expressed as an annual rate on interest-only payments.
Lender fees (also called origination or commitment fees) commonly range from 1% to 4% of the loan amount, paid at closing.
Broker fees apply when using a mortgage broker to find and arrange the loan.
Legal fees apply on both sides — the borrower pays their own lawyer and sometimes the lender’s legal costs as well. Budget $1,500–$3,000+ for legal, depending on complexity.
Appraisal costs are typically $300–$600 for residential properties and higher for complex or commercial assets.
Running the full cost of the loan, not just the interest rate, is essential before proceeding.
Disclaimer: All rates and fees referenced above are subject to change and vary based on current market conditions. LendToday.ca is not liable for any variance in rate and fee offers. All rate and fee offers depend on the application, supporting documents, and home value.
Process and Timeline
A typical hard money deal in Alberta moves through these stages:
Initial consultation and property review → mortgage commitment issued (outlining rate, LTV, fees, and term) → appraisal ordered → legal review and mortgage preparation → closing and funds advanced.
Most straightforward files fund within 10–21 days. Delays usually come from appraisal scheduling, title issues, or incomplete documentation. Having your mortgage statement, property details, and financial summary ready speeds up the process significantly.
Risks to Understand – Hard Money Lender Alberta
Higher cost of capital. At 10–12% interest plus fees, carrying a hard money loan for 12 months on a $300,000 borrowing is materially expensive. The math must work for your situation.
Disclaimer: Interest rates and fees referenced are subject to change and vary based on current market conditions. LendToday.ca is not liable for any variance in rate and fee offers. All rate and fee offers depend on the application, supporting documents, and home value.
Short terms with no renewal guarantee. Unlike a conventional mortgage, a private lender is not obligated to renew at maturity. If your exit fails, you may face a demand for repayment without the ability to satisfy it.
Equity erosion. If the loan proceeds are used to fund lifestyle expenses or a business rather than something that improves your financial position, you may emerge worse off than when you started.
Property enforcement. If a borrower defaults, the lender can pursue the power of sale or foreclosure. Alberta’s enforcement process has timelines and legal steps, but the outcome, loss of the property, is real.
When Hard Money Makes Sense (and When It Doesn’t)
It makes sense when you have meaningful equity, the situation causing the bank decline is temporary and fixable, your exit strategy is concrete and achievable within the loan term, and speed or flexibility is genuinely necessary.
It does not make sense when equity is thin, there is no realistic exit within 12 months, the property is in a declining or illiquid market, or the borrower is using the loan to delay an inevitable financial problem rather than solve one.
Frequently Asked Questions
How fast can a hard money lender in Alberta fund a mortgage?
Most clean files fund within 10–21 days. Complex situations or appraisal delays can extend this.
What is the maximum LTV?
Typically 75–80% for urban residential properties. Rural, vacant land, or lower-demand markets may be capped lower.
Can I qualify with bad credit?
Yes. Credit is secondary to equity. However, very poor credit may affect the rate or maximum LTV offered.
Is a private mortgage the same as hard money?
Hard money lenders are a type of private mortgage lender. The terms are often used interchangeably in Alberta.
What happens if I can’t repay at maturity?
The lender may demand repayment and pursue enforcement. This is why exit planning before you sign is critical, not after.
Are private lenders regulated in Alberta?
Mortgage brokers and agents are licensed provincially through RECA. The mortgage itself must be legally registered on title, and a lawyer is required to close.
Final Thoughts
A hard money lender in Alberta can be a legitimate and effective short-term tool when used with clear intent. It provides speed, equity access, and flexibility that conventional lenders simply cannot match in certain situations. But the higher cost and short timeline create real consequences if the borrower enters without a realistic exit. Confirm your property value, calculate your true LTV, understand the all-in cost of the loan, and have your repayment plan in place before you sign anything.
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