In general, interest rates on private mortgages are higher than with a traditional loan. Since the borrower frequently does not have a sufficient credit rating, the lender feels they are taking a chance and need to include a little cushion. There are other factors like the location of the property, i.e. whether it is located in a high-crime area or a neighbourhood that has declining property values and the general condition of the house. Fixer-uppers are more of a risk because the homeowner will need additional cash to complete the renovation. At this point first mortgage interest rates by private lenders start at 6.99%. Second mortgage interest rates start at 10.99%.