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What’s the difference between a MIC and a private individual lender?
Answered by Rajiv Verma, Mortgage Broker · Reviewed 13 August 2026 · About a 4 minute read
The direct answer
A MIC — mortgage investment corporation — pools money from many investors and lends it out like an institution. It’s accredited, the funds are ready, and it looks at your credit, affordability and exit plan, not just your equity. A private individual lender is one person with their own money and their own rules. The individual can move faster and take on harder files — very poor credit, an exception on loan-to-value, a closing that has to happen now. A MIC handles most private files. An individual handles the ones a MIC won’t.
THE SHORT VERSION
- MIC = pooled investor money, institutional in character, accredited
- Individual = one person, own money, own rules
- MICs look at credit, affordability, suitability and the exit — not equity alone
- MICs can customise the structure: match the term, interest-only, open or part-open
- Individuals are for the harder cases — poor credit, an LTV exception, or speed
- A private lender should be checked as carefully as a borrower is. That’s my job, not yours.
MICs — what they actually are
A mortgage investment corporation raises money from a pool of investors and lends it out as mortgages. That structure is what makes it behave like an institution rather than an individual.
The funds are there. A MIC isn’t waiting on one person deciding whether they feel like lending this month.
It’s accredited and it operates to a policy. There’s an underwriting standard, and it applies consistently.
It looks at more than equity. Credit, affordability, suitability — and, more than anything, the exit.
Why a MIC cares so much about your exit plan: it isn’t in the business of holding you for ten years. It wants to lend for a short term, be repaid, and lend again. That’s not a limitation — it’s alignment. A lender that wants you gone in eighteen months wants you to improve, which is the same thing you want.
And they’re flexible on structure in ways banks aren’t. A MIC can match the term to your situation, run it interest-only, allow principal payments, and make it open or partly open. The mortgage gets built around the plan rather than the plan being squeezed into a product.
Private individual lenders — where they fit
A private individual is exactly that: a person with money to lend, setting their own terms.
They can do things a MIC won’t. When credit is very poor, when the file needs an exception on loan-to-value, or when a closing has to happen faster than any policy-driven lender can move — an individual can say yes where a MIC’s guidelines say no.
That flexibility is real, and on certain files it’s the only thing that works.
The part most people don’t know: I check the lender too
Here’s something worth understanding before you take money from anyone.
Not every private lender is the same, and these days they have to be qualified. There’s a meaningful difference between an accredited investor who lends professionally and someone lending out of their own line of credit.
You’re assessed by the lender. The lender should be assessed too. That’s part of what I do on every private file, and it’s a large part of why a private mortgage placed through a broker is a different proposition to an introduction to “someone with money.”
The paperwork difference nobody mentions
There’s a disclosure step in Ontario private lending that changes depending on which of these two you’re dealing with, and almost nobody explains it.
When a mortgage is arranged with a private individual investor, that investor receives a prescribed investor disclosure statement — Form 1. It sets out the mortgage they’re being asked to fund so they can decide whether to lend. It protects the investor, not you.
Rajiv’s position, as the licensed broker on the file: “Where a mortgage is placed with a mortgage investment corporation rather than with an individual private investor, an investor disclosure Form 1 is not required.”
That’s because a MIC is the lender in its own right, with its own underwriting and its own obligations to the people who invested in it — rather than an individual being asked to fund one specific mortgage.
Why a borrower should care about a form that isn’t theirs
Because it tells you what kind of lender you’re actually dealing with.
If a Form 1 is being prepared, there is an individual investor at the other end of your mortgage. That’s not a problem — but it is a fact worth knowing, because an individual’s circumstances can change in ways a MIC’s don’t. Renewal at the end of your term depends on one person still wanting to be in the deal.
If no Form 1 is involved and you’re told it’s a MIC, that’s consistent. If someone tells you it’s a MIC and an individual investor disclosure is being prepared anyway, ask who is actually lending you the money.
This is general information about how the disclosure works, not advice to an investor. Anyone considering lending money on a mortgage should get independent legal and financial advice before doing so.
Side by side
| MIC | Private individual | |
|---|---|---|
| Where the money comes from | A pool of many investors | One person’s own funds |
| Character | Institutional, accredited | Individual, own rules |
| What’s assessed | Equity, credit, affordability, suitability, exit | Primarily equity and the situation |
| Speed | Fast | Can be faster |
| Difficult files | Within policy | Can go where a MIC won’t |
| Structure | Term matching, interest-only, open / part-open | Varies by the individual |
| Investor disclosure (Form 1) | Not required | Provided to the investor |
| Typically used for | Most private files | The exceptions |
Which one is right for you
Most files are a MIC file. Better structure, a consistent standard, and a lender whose interests line up with getting you out and back to B or A lending.
An individual lender is the right answer when the file genuinely needs it — when credit rules out the alternatives, when an exception is required, or when the timing leaves no other route.
It should be a decision, not a default. If someone puts you with an individual lender without explaining why a MIC wasn’t the answer, that’s a fair question to ask.
What to check before you sign anything private
- Who the lender actually is — a MIC, or an individual
- Why this lender rather than the alternative
- The exit plan — what has to change, and by when, to move to B or A lending
- The full dollar cost, not just the rate — lender fee, broker fee, legal, appraisal, registration
- What happens at the end of the term, and what renewal looks like if you’re not ready
- Whether the structure fits — term, interest-only, open or closed
What to do next
If a private mortgage is being discussed, the useful conversation is which type and why.
Send me the details and I’ll tell you whether it’s a MIC file or an individual file, what it’s likely to cost, and — the part that matters most — what the plan is for getting you out of it.
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Answered by Rajiv Verma, Mortgage Broker · Mortgage Architects — FSRA Brokerage Licence #12728 · Licensed in Ontario · Office 289.505.0631 · Direct 647.291.7116
General information about Ontario mortgages — not financial, legal or mortgage advice. Lender types, policies and terms vary. Every file is reviewed individually.