MLI Select vs Private Mortgage Canada: What to Know

Investors comparing MLI Select vs private mortgage Canada often look first for a rate comparison. CMHC, FSRA and RECA publish how each channel is regulated and what problem it is designed to solve, not a single rate sheet.

We already have older posts on MLI Select vs private lending and private money options. This article focuses on regulator language from FSRA and RECA beside CMHC’s current MLI Select page. For product mechanics, also see MLI Select overview and MLI Select vs conventional mortgage Canada.

Last updated: October 19, 2026. This article reflects CMHC’s MLI Select page (date published September 21, 2026), FSRA private mortgages, FSRA mortgage brokering, and RECA licence types pages as opened in October 2026.

What each option actually is

MLI Select is CMHC mortgage loan insurance for multi-unit housing. The page describes point-based criteria for affordability, energy efficiency and accessibility, with insurance flexibilities such as higher loan-to-value or loan-to-cost ratios and longer amortizations when point thresholds are met. Projects need at least 5 units (50 units/beds for retirement homes), among other eligibility rules.

FSRA describes a private mortgage as a loan from a private lender, which can include mortgage investment corporations, private companies, or an individual. FSRA’s consumer guidance says private or alternative mortgages are supposed to be a short-term solution, can be easier to obtain than a traditional mortgage, and may involve higher interest rates and fees plus additional conditions.

That is the structural MLI Select vs private mortgage Canada contrast: insured multi-unit flexibilities with social-outcome commitments, versus a privately funded loan that regulators repeatedly frame as temporary.

Regulation: FSRA Ontario and RECA Alberta

In Ontario, FSRA states that carrying on business as a mortgage lender, or dealing in mortgages, generally requires a mortgage brokerage licence under the Mortgage Brokerages, Lenders and Administrators Act, 2006, unless an exemption applies. FSRA’s consumer pages say borrowers using private lenders should work with a licensed Level 2 mortgage agent or a mortgage broker.

FSRA also warns that holding an agent or broker licence does not by itself make someone an exempt private lender; transactions must still go through a licensed brokerage or an exempt party.

In Alberta, RECA says anyone who deals in mortgages on behalf of another person for compensation, or represents themselves as a mortgage broker, must hold a mortgage broker licence unless an exemption applies. RECA’s examples say you do not need a licence when lending your own money secured by a mortgage. Banks, credit unions and similar institutions have statutory exemptions under the Real Estate Act, subject to the regulations.

RECA’s 2025 re-licensing education for mortgage licensees focused on private lending, which RECA’s Industry Council minutes describe as loans secured against property provided by an individual or company and not by a financial institution. That education push underlines why MLI Select vs private mortgage Canada is a live compliance topic, not only a pricing topic.

When developers compare MLI Select vs private mortgage Canada

FSRA lists questions borrowers should ask, including why a private mortgage is recommended, whether it is the most affordable suitable option, term length, repayment schedule, and whether the exit strategy is realistic. Those questions apply whether the security is a house or a small multi-unit building.

Hypothetical example: bridge then refinance

Hypothetical example. An Ontario investor uses a private first mortgage to close a five-unit walk-up quickly, with a written exit plan to refinance into an MLI Select-insured loan after renovations meet accessibility and energy attestations. The broker documents why traditional lending was not available and why the private term length matches the renovation schedule. Ask your broker for the rate and fees that apply to your term sheet; those figures change and are not published as a public schedule.

Questions to ask before you choose

Use these questions whenever MLI Select vs private mortgage Canada comes up in a term sheet.

1. Approved lender (MLI Select): Which point total and which flexibilities are available for this project?
2. Mortgage professional: Are you licensed with FSRA (Ontario) or RECA (Alberta) for this activity?
3. Private lender path: What is the exit strategy when the private term ends, and what happens if it fails?
4. Lawyer: How will any private charge and any CMHC-insured first mortgage interact on title?
5. Attesting professionals: If MLI Select is the exit, when must accessibility and energy evidence be ready?

Alberta notes

• RECA licensing: Licence types and the Real Estate Act definition of mortgage broker.
• Private lending education: RECA re-licensing education notes the 2025 private lending course for mortgage licensees.
• MLI Select product rules: CMHC MLI Select and our elevator and accessibility checklist posts for the accessibility pillar.
• Prior NHA coverage: vs private lending guide; this post does not replace legal advice.

Checklist: before you sign a private mortgage term sheet

FSRA’s consumer guidance and RECA’s licensing rules support a practical pre-signing checklist for Canadian multi-unit investors.

1. Licence check: Confirm every person dealing in the mortgage for compensation holds the right FSRA (Ontario) or RECA (Alberta) licence, or sits in a statutory exemption.
2. Why private: Get a written explanation of why traditional or CMHC-insured options are not available or not suitable for this file.
3. Term and repayment: Record term length, interest-only versus principal-and-interest, renewal conditions, and all lender fees.
4. Exit strategy: Write the plan to refinance or repay when the private term ends, and stress-test what happens if that plan slips.
5. MLI Select exit: If the exit is an MLI Select-insured loan, list the accessibility, energy and affordability attestations that must be ready, and who will sign them.
6. Title and priority: Ask counsel how the private charge will rank against any future CMHC-insured first mortgage.
7. Cost total: Add lender fees, brokerage compensation, legal fees and any renewal penalties so you can compare total cost, not only the headline rate your broker quotes.

FSRA questions worth repeating to your broker

FSRA lists questions consumers should ask before taking an alternative or private mortgage. Adapted for multi-unit investors, ask:

• Why is a private mortgage recommended instead of a traditional or CMHC-insured multi-unit loan?
• Is this the most affordable suitable private option, and if not, why is it preferred?
• What are the term length, interest rate, repayment schedule and fees?
• What happens if renovations or accessibility work change the property or the exit timeline?
• Does the exit strategy sound achievable before the private term ends?

How MLI Select insurance flexibilities differ from a private term sheet

CMHC’s MLI Select page describes point-based insurance flexibilities for multi-unit housing, including pathways tied to affordability, energy efficiency and accessibility commitments. Those flexibilities are product features of mortgage loan insurance, not a private lender’s term sheet.

A private mortgage term sheet typically sets its own interest terms, fees, term length and renewal conditions. FSRA emphasizes that private or alternative mortgages are often short-term and may include interest-only payments. Comparing a CMHC-insured structure with a private charge therefore means comparing insurance eligibility and social-outcome commitments on one side with exit timing and total cost on the other, using written quotes rather than assumed rate tables.

Frequently asked questions

Is MLI Select vs private mortgage Canada a choice between two CMHC products?

No. MLI Select is CMHC multi-unit mortgage loan insurance with point-based flexibilities. A private mortgage is a loan from a private lender, which FSRA describes as an alternative to traditional bank or credit-union mortgages. They are different products under different rules.

Does Alberta require a licence for private lending?

RECA says anyone who deals in mortgages on behalf of another person for compensation must hold a mortgage broker licence, unless an exemption applies. Lending your own money on your own behalf does not require a licence. Confirm your facts with RECA.

What does FSRA say private mortgages are for?

FSRA’s private mortgage page says alternative or private mortgages are typically a temporary option for one or two years, often with higher interest rates and fees, shorter terms, and sometimes interest-only payments. FSRA stresses a realistic exit strategy.

Can MLI Select and private money be combined?

CMHC’s public MLI Select page does not publish a rule for stacking private second mortgages. Ask your approved lender and lawyer. Confirm the current product rules with CMHC and your approved lender.

Who protects consumers on private mortgages in Ontario?

FSRA licenses mortgage brokerages, brokers and agents under the Mortgage Brokerages, Lenders and Administrators Act, 2006. FSRA says consumers needing private mortgages should work with a licensed Level 2 agent or a broker.

Are rates compared in this article?

No. Neither CMHC’s MLI Select page nor the FSRA and RECA consumer pages publish a definitive private-mortgage rate table for multi-unit properties. Ask your lender for current pricing.

Sources

• CMHC: MLI Select (date published September 21, 2026)
• CMHC: Accessibility Criteria Attestation (PDF)
• CMHC: Required Documentation Guide (PDF)
• FSRA: Private Mortgages
• FSRA: Mortgage Brokering
• FSRA: Working with a Mortgage Professional
• FSRA: You need a licence for that
• RECA: Licence Types
• RECA: Real Estate Act
• RECA: Re-Licensing Education

This article is general information, not legal, tax, financial, or professional advice. MLI Select terms are set by CMHC and may change, and building code or mortgage-licensing interpretations rest with the relevant authority. Confirm current requirements with CMHC, an approved lender, and a qualified professional before making decisions.

Comparing MLI Select and private financing for a multi-unit deal? Book a call to talk through your options.