Most Agents Freeze When You Mention This Powerful (and Legal) Financing Strategy. That’s Bad News for Their Clients.
When I bring up vendor take-back (VTB) mortgages in a room full of agents, I usually get that look.
Wide eyes. Frozen posture. Like a deer caught in the headlights.
Then comes the familiar line:
“I think I remember reading about that… back in my real estate course.”
And just like that, they move on. No questions. No curiosity. No idea they’re leaving tens of thousands of dollars on the table for their clients.
Here’s the truth:
Vendor take-back mortgages are making a quiet comeback—and if you’re not using them to your advantage, you could be missing out in a big way.
What’s Really Happening Behind the Scenes
In 2021, Canadian sellers held $767 million in vendor take-back (VTB) mortgages.
By 2023, that number exploded to $3.5 billion.
(Source: CoStar Canada)
Why? Because homes are harder to sell. Borrowing is more expensive. And smart sellers are using VTBs to stand out in a crowded market—and get top dollar.
If you’re not considering this, you’re not playing the full game.
What Is a Vendor Take-Back Mortgage (And Why Should You Care)?
A VTB happens when a seller agrees to act as the lender for the buyer. It’s perfectly legal—and often smarter—than going through the bank.
Let’s break it down:
Example:
- Home sells for $800,000
- Buyer puts down $100,000 (12.5%)
- Seller holds a mortgage for $700,000
Instead of the bank collecting the interest, the seller does.
What’s at Stake for the Seller?
With nearly 40% of Ontario homes mortgage-free, many sellers walk away from a sale with hundreds of thousands in equity. Most just dump it into GICs or the stock market, hoping for stable returns.
But here’s the better play:
If a seller holds a $700,000 VTB at 5%, they’ll collect $4,071/month in payments.
Over 5 years? That’s over $164,000 in interest—plus $620,000 back.
Compare that to 4% in a GIC.
Now ask yourself: Are you leaving money on the table?
What’s at Stake for the Buyer?
Here’s where fear becomes reality:
If that same buyer went through a traditional lender, they’d need to pay a CMHC premium of $21,700—plus 13% HST, totaling $24,500 in upfront insurance fees.
With VTB financing, they skip it. Completely.
That’s $25,000 in savings, before they even move in.
Plus:
- Easier approval (especially for self-employed or new-to-Canada buyers)
- Flexible interest rates
- No CMHC red tape
If You’re Not Discussing This Strategy, You May Be Leaving Money on the Table.
I’ll be blunt. Most agents don’t understand seller financing, or are unaware if it is possible—so they avoid it. But that mistake could cost their clients tens of thousands of dollars.
In today’s high-rate market, buyers need options. Sellers need leverage.
Vendor take-back mortgages offer both.
What’s the Next Step?
Don’t leave this kind of strategy on the shelf.
Book a 30-minute call with me and let’s talk about whether VTB financing could make or save you money—sometimes a lot of it.
Lindsay Smith: Your guide to smart, profitable real estate moves in today’s market
Connect with us on Facebook, Instagram, LinkedIn and YouTube.