A new Ontario fintech is promising investors more than double the typical 2.5% GIC rate by letting them fund mortgages in small fractional stakes

It's an intriguing idea. It's also still awaiting full regulatory approval. As of late 2025, Loanova was accepting investor applications on its website while awaiting approval from the Financial Services Regulatory Authority of Ontario (FSRA), with a target launch in the first quarter of 2026.

FSRA approval has not been publicly confirmed as of April 2026, but interest is building for fractional mortgage investments — along with some serious concerns regarding investor suitability.

How does fractional mortgage investing actually work?

In a traditional syndicated mortgage, a group of investors pools capital to fund a single residential loan. Loanova's platform digitizes and opens up this structure to retail investors — everyday Canadians with money they want to invest — with no accreditation requirement.

Built on open banking principles and powered by AI underwriting, the platform connects everyday investors with qualified residential borrowers through a data-driven ecosystem. Its borrower-grading model goes beyond credit scores to analyze rent-payment histories, cash-flow consistency, employment and education data, and spending trends (2).

Investors only need to pass a Know Your Customer (KYC) suitability evaluation and confirm they are comfortable with a defined degree of investment risk. From there, they receive fractional exposure to first-lien residential mortgages — meaning their investment is secured against the underlying property.

What returns can investors expect — and how do fees compare?

Nathan Saliagas, co-founder of Loanova, uses BMO's three-year non-redeemable GIC, which offers a return rate of less than 2.5%, as the company's benchmark. Based on this, Saliagas suggests investors could earn more than double that return on a comparable term through the platform (3).

But what about the fees? The management fee structure is notably lean: Starting at 0.7% for grade A mortgages and capped at 1% for grade D. When compared to the approximate 4% typically charged by a mortgage investment corporation (MIC), Loanova's fee structure is appealing.

Loanova co-founder Josh Gruneir describes it as a new middle ground — mid-level risk, significantly higher reward than a GIC, positioned in a space that currently doesn't exist in the Canadian investment market.

But the risks are not to be ignored.

Fractional mortgages carry real risks that GICs do not.

• They are not CDIC insured.
• Returns are projected, not guaranteed.
• Liquidity may be limited compared to redeemable deposit products.

And the borrowers on the other side of these mortgages are, by design, people the banks declined — which means the underlying credit risk profile is higher than a prime residential mortgage.

What does FSRA oversight actually mean for investor protection?

Investors may consider using FSRA registration and approval as a de facto risk assessment test — but they shouldn't.

FSRA registration is not a rubber stamp on returns or safety — it is a licensing framework governing how the platform operates and what disclosures it must make.

It's also worth noting that this Ontario mortgage regulator has made the private mortgage sector a key supervision priority. In a recent review, FSRA found that only 35.5% of private mortgage files had correct annual percentage rate (APR) calculations, plus there were trust-account deficiencies at several licensed mortgage administrators. As a result, FSRA is actively tightening those standards heading into 2026, which is a positive signal — but it also means investors are entering a sector the regulator is still working to clean up (4).

As of mid-2025, FSRA licensed 266 mortgage administrators overseeing approximately $448 billion and more than 972,000 mortgage investments for 756,000 investors across Ontario.