Is vendor take-back financing common when buying a multi-unit investment property in Ontario?

Vendor take-back financing, where the seller effectively lends the buyer part of the purchase price by holding a mortgage themselves rather than the buyer obtaining that portion from a conventional lender, does appear in some Ontario multi-unit and investment transactions, but it is not the standard or expected way most of these deals are financed. It tends to come up in specific situations, such as where conventional or CMHC-insured financing does not cover the full purchase price or cannot close on the buyer's required timeline.

Because a vendor take-back is, at its core, a private mortgage arrangement between two parties rather than a routine lender product, its terms, interest rate, repayment schedule, and default consequences need the same careful legal review as any other mortgage, and arguably more, since it is negotiated directly rather than following a standardized lender template. If a seller is offering this as part of your multi-unit purchase, have your lawyer review the terms independently before agreeing, and do not assume it works like a conventional mortgage simply because it functions similarly on paper.