Frequently Asked Questions

We understand that you need answers to some questions before speaking with us. We've compiled a list of commonly asked questions to help you.

Question 1: What is a private mortgage?

A private mortgage, in Canada, is a type of mortgage that is funded by a private individual or a group of private investors, rather than a traditional financial institution such as a bank or a credit union.

Question 2: Why should I invest in private mortgages?

Private mortgages offer steady passive income, portfolio diversification, real estate-backed security, and the potential for higher returns compared to traditional investments.

Question 3: What types of properties do private mortgages finance?

Private mortgages can finance residential, commercial, and industrial properties.

Question 4: What is the typical duration of a private mortgage?

Private mortgages are typically short-term in nature, ranging from days or months to years, depending on the borrower’s needs and the purpose of the loan.

Question 5: How do private mortgages generate passive income?

Investors receive regular interest payments from the borrower throughout the loan term, creating a steady income stream.

Question 6: What kind of returns can I expect from private mortgages?

Returns are typically higher than traditional investments like stocks, bonds, or GICs due to the higher interest rates charged to borrowers.

Question 7: Are the returns guaranteed?

While private mortgages offer the potential for attractive returns, they involve risks, including borrower default. However, real estate collateral provides a level of security for the investment.

Question 8: Are private mortgages a secure investment?

Yes, private mortgages are secured by real estate collateral. If a borrower defaults, investors can recover their investment by taking possession of and selling the property.

Question 9: What measures does BNQ Capital take to manage risk?

BNQ Capital employs a rigorous underwriting process and structures mortgages with conservative Loan-to-Value (LTV) ratios, typically averaging 65-70%, to ensure stability and capital preservation.

Question 10: How do private mortgages diversify my portfolio?

Private mortgages are an alternative asset class that is less correlated with traditional investments like stocks and bonds, helping reduce overall portfolio risk.

Question 11: Can I invest in both residential and commercial mortgages?

Yes, BNQ Capital offers diverse opportunities, allowing you to choose between residential and commercial mortgage investments based on your risk profile and financial goals.