The client
A homeowner in Parksville carried a first mortgage and a $96,000 private second, and wanted both consolidated into one new mortgage.
First mortgage
$210,000, 5.45%
Private second principal
$96,000
Lender's claimed rate
10.75%
Household income
$8,500/month
The problem
A private mortgage registered in British Columbia is filed on a Land Title Act Form B, which incorporates its interest rate and other terms either by setting them out in full or by referencing a separately filed set of Standard Mortgage Terms on record with the Land Title Office. This lender's payout statement priced five months of accrued interest at 10.75% -- the rate the lender said the mortgage carried.
What the registered Form B actually showed
- ▸This mortgage's Form B incorporated a filed set of Standard Mortgage Terms by its own D.F. filing number, rather than setting the rate out directly in the document itself
- ▸Pulling that filed document from the Land Title Office showed the actual registered rate was 9.25%, not the 10.75% the lender's payout statement assumed
- ▸A registered mortgage's terms are whatever is actually on file at the Land Title Office -- not whatever a lender's own internal records or a verbal understanding says they are
Nothing about this file involved a dispute over what had been agreed verbally. It involved confirming what had actually been registered, and pricing the payout to that document instead of to the lender's own recollection of it.
The numbers
Once the registered rate was confirmed, correcting the payout was simple arithmetic over the five months since the last statement.
| Correcting the payout to the registered rate | Amount |
|---|---|
| Private second principal | $96,000 |
| Accrued interest, at the lender's claimed 10.75% | $4,300 |
| Accrued interest, at the registered 9.25% | $3,700 |
| Corrected payout | $99,700 |
| Total debt service | Figure |
|---|---|
| Payment at the qualifying rate (7.45%), 25 years | $2,256/mo |
| Property tax | $300/mo |
| Heat | $140/mo |
| Car loan | $255/mo |
| Total debt service | 34.7% |
$600 is the difference between five months of interest at 10.75% and at the 9.25% actually on file -- a modest figure, but one the registered document, not the lender's own statement, was the correct source for. 34.7% left comfortable room on $8,500/month income.
The solution
A submortgage broker registered under BC's Mortgage Brokers Act treated the lender's stated rate as a claim to verify, not a fact to accept.
First, ordered the registered Form B mortgage directly from the Land Title and Survey Authority, rather than relying on the lender's own payout statement alone.
Second, traced the Form B's own D.F. filing number to the actual filed Standard Mortgage Terms, confirming the registered rate was 9.25%, not 10.75%.
Third, recalculated the accrued interest at the registered rate and presented both documents to the lender's counsel before the payout was treated as final.
The outcome
The consolidated refinance funded at 5.45%, paying out the corrected $99,700 balance alongside the first mortgage, for $309,700 at 34.7% total debt service.
Because this is an uninsured consolidation refinance, CMHC's ratio maximums do not apply directly; the 34.7% figure is informational.
What to take from this file
- 01A BC mortgage's actual terms are whatever is registered on its Form B and any filed Standard Mortgage Terms it references -- not whatever the lender's own payout statement assumes.
- 02Where a Form B incorporates terms by a D.F. filing number, pull that filed document directly. The rate is not always set out in the Form B itself.
- 03Never accept a private lender's stated rate without confirming it against the registered document. A verbal or internal understanding is not what governs.
- 04Even a modest correction is worth making. $600 on this file was small, but it was the borrower's money, priced to the wrong document.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
Illustrative in this file — lender-specific, not rules:
- ▸5.45% / 5.45% new contract rate — rates move daily; not a quote.
- ▸$96,000 principal / five-month accrual window — this file's own deal-specific figures; every private mortgage's own accrual period is individual.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.