Private Credit
Canada vs. the U.S.: Why the Rules of the Game Are Different for Private Mortgage Funds
One key difference? In Canada, lenders are restricted from charging higher interest rates or fees on defaulted loans unless they can document specific expenses. This limits what can be recovered, even in complex or high-risk loans. In contrast, the U.S. allows private lenders to implement “default rates” of interest—often around 24% annually—which compensates investors for taking on higher risk and helps maintain fund stability.
Michael Steepe
January 10, 2025
