In April 2022, the government and FSRA implemented new licensing classes with enhanced educational requirements for brokers and agents working with private mortgage lenders and raising capital. This initiative supports the Ontario government’s direction to introduce licensing categories that better respond to the unique practices required by certain segments of the mortgage market, and enhance competency in the mortgage brokering sector to better protect consumers.

What will change?

Effective April 1, 2023, there will be two licensing classes for mortgage agents as follows:

  • Level 1 – agents are authorized to deal and trade in mortgages with financial institutions or approved by the Canada Mortgage and Housing Corporation (CMHC) approved lenders under the National Housing Act
  • Level 2 – agents are authorized to deal and trade in mortgages with mortgage lenders, including private individuals.

Full details can be found in FSRA’s guidance.

To demonstrate their competency in dealing and trading in private mortgages, mortgage brokers, including principal brokers and agents who want to hold a level 2 licence, will need to complete and pass the Private Mortgages Course approved by FSRA. Brokers and agents who have five years of continuous licensing experience may choose to write the Private Mortgages Course Challenge Exam in place of completing the course.

The objective of the course and exam is to ensure that licensees have enhanced knowledge about the regulatory framework, transaction processes and risks (including risk of fraud) associated with private lending.

Key dates

  • Early 2023 – Private Mortgages Course and Challenge Exam available
  • October 31, 2023 – deadline to pass the Private Mortgages Course Challenge Exam
  • March 31, 2024 – deadline to complete the Private Mortgages Course

What this means for you

Existing brokers and agents who are eligible and wish to hold a level 2 agent or broker licence must successfully pass the Private Mortgage Course or the Challenge Exam before the deadlines. Licensees that do not pass the Challenge Exam by October 31, 2023, must complete and pass the Private Mortgage Course by March 31, 2024. Those who do not complete these requirements will transition to a Level 1 agent licence on April 1, 2024.

If a principal broker does not successfully complete the course or the exam, its mortgage brokerage must appoint another principal broker who has the appropriate experience and educational requirements.

Be sure to watch for more updates on this important initiative from FSRA, including course availability and an industry webinar.