Answers › A, B & Private Lending
What is a MIC or B lender, and how is it different from a bank?
Answered by Rajiv Verma, Mortgage Broker · Reviewed 13 August 2026 · About a 4 minute read
The direct answer
Think of them as the lenders who live between the banks and private individuals. A MIC — mortgage investment corporation — pools money from many investors and lends it out. B and alternative lenders work to more flexible rules than a bank, so they’ll consider situations a bank won’t. They cost a bit more, and that’s the trade for the flexibility. They’re institutional in character and accredited — not one person deciding on a whim.
THE SHORT VERSION
- They sit between banks and private lenders — not at the bottom of anything
- MICs run on a pool of investor money, so the funds are there
- More flexible rules than a bank, and a higher cost for it
- They assess income differently — including using gross income, not net
- They can consider credit scores below 500, with a rate premium
- Accredited and institutional — this is not “a guy with money”
Why they exist at all
A bank has one question: does this file fit our guidelines? Those guidelines are written for the most common situation — steady employment income, documented the standard way, clean credit.
Plenty of perfectly good borrowers don’t look like that. Self-employed. Commission-based. Recently divorced. Rebuilding after a rough two years. New to Canada. A landlord with four properties. None of those are bad borrowers — they just don’t fit a form designed for someone else.
B lenders and MICs exist to look at those files properly. They ask a different question: does the income and the story hold together?
What actually changes at this tier
They use gross income, not net
This is the single most useful thing a self-employed person can learn, and almost nobody explains it.
Your accountant works hard to reduce your taxable income. That’s the right thing for your tax bill and the wrong thing for a bank, which reads the bottom line of your return and sees a small income.
B and alternative lenders assess gross income. The same business, the same returns, a completely different number — and often a completely different answer.
Credit is read, not just scored
B and alternative lenders can consider scores below 500, with a rate premium. What matters is the reason behind the number, whether the situation is stable or improving, and what the rest of the file looks like.
The structure can flex
MICs can match the term to your situation, run it interest-only, allow principal payments, and make the mortgage open or partly open. The mortgage gets built around the plan rather than the plan being squeezed into a product.
What it costs, honestly
More than a bank. Less than private.
The rate carries a premium, and there can be lender and broker fees on top. That’s not a penalty — it’s the price of a lender doing more work on a file a bank wouldn’t read at all.
What I won’t do is quote you a number on a web page. The cost depends on your equity, the property, the situation and the exit. What I will do is show you the full dollar cost before you decide anything — not just the percentage.
Where they sit, in one table
| Bank / A lender | B lender / MIC | Private individual | |
|---|---|---|---|
| Income | Net, documented their way | Gross | Secondary to equity |
| Credit | 620+ insured | Can go below 500 | Considered, not decisive |
| Cost | Lowest | A premium on top | Highest |
| Character | Institutional | Institutional, accredited | Individual |
When this tier is the wrong move
When you’d actually qualify at a bank. If the file fits, it should go to A lending. Paying a premium you didn’t need to pay is a bad outcome, and it happens when nobody tests the cheaper option first.
When the payment only works on paper. A higher rate on a file that’s already tight makes a stressful situation worse, not better.
When there’s no plan to move back up. This tier is a step, not a home. If nobody has told you what has to change to get back to a bank, you’ve been sold a mortgage rather than given a plan.
What to do next
If a bank has said no, the useful question isn’t why — it’s which tier does this file actually belong in.
Send me the details and I’ll tell you straight, including if the answer is that you should be at a bank and the file was simply presented badly.
Related questions
- What’s the difference between a MIC and a private individual lender?
- How do I get from a private mortgage back to a bank?
- What happens if I can’t make the payments?
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 guidelines vary and change. Every file is reviewed individually.