B-lender pricing, broken into the pieces a borrower actually needs explained.

A bank's posted rate is close to the all-in cost for a qualifying borrower. A B-lender quote isn't built the same way — it's priced to compensate the lender for underwriting outside the standard box, and that compensation is split between the interest rate itself and one or more separately disclosed fees, rather than folded entirely into the rate.

That split exists partly because it's how the lender prices risk and partly because Ontario's disclosure regime, and the equivalent frameworks in other provinces, requires fees to be itemized rather than buried in a single blended number — see what actually makes a lender a B lender for the underwriting side of this same distinction.

For a borrower used to a bank's single posted rate, this itemization can read as more expensive than it actually is, simply because it's visible. A bank's cost of underwriting a straightforward file is folded invisibly into its rate spread across its whole book; a B lender pricing a specific file's specific risk has to show its work in a way a prime lender never has to. That's a disclosure difference as much as a genuine cost difference, and it's worth explaining to a client before they see the itemized number and assume it's all new cost.

There's also a term-length dimension worth flagging up front. A one-year B-lender term with a lender fee attached carries a very different effective annual cost than the same fee spread across a longer term would, and the disclosure's cost-of-borrowing and APR figures are precisely what force that arithmetic into the open. Walking a client through the APR figure specifically, not just the headline rate, is often what actually explains why a shorter-term product can look more expensive on paper than its interest rate alone would suggest.

Not every file carries all three at meaningful levels — a straightforward B-lender file may carry only a modest rate premium and no separate broker fee, while a more complex private-lender file can carry all three at once. What matters is that each is disclosed as its own line, not folded into a single number the borrower has to reverse-engineer.

Timing matters as much as the amount. A lender fee is typically fixed once the commitment is issued and doesn't move unless the deal terms change; a broker fee, by contrast, should be discussed with the client well before a commitment exists, since it's the brokerage's own charge and there's no reason it needs to wait for the lender's paperwork to be put in writing.

Commonly quoted ranges for lender and broker fees vary widely across the industry, and they vary by lender, by LTV, by how much income verification the file required, by property type and location, and by how urgently the deal needs to close — there is no single standard figure a broker can quote a client in advance. The only reliable number is the one that appears on that specific lender's written commitment for that specific file.

That variability cuts both ways for a broker managing client expectations. Underselling the likely cost early in the conversation, to make the alternative-lending option sound more palatable, tends to produce a client who feels misled once the actual commitment arrives. Setting expectations as a range up front, and being explicit that the exact figure depends on the specific lender and file, holds up better once the real numbers are on paper.

Urgency deserves its own mention as a pricing input, because it's easy to underrate. A file that needs to close in a compressed timeline, for a closing date that can't move, is asking the lender to compress its own review and legal process to match — and that compression tends to show up in the quoted fee. Building in realistic lead time wherever possible is one of the few levers a broker actually controls that can influence where a specific quote lands within the commonly quoted range.

In Ontario, the cost of borrowing — including any brokerage fee — must be disclosed to the borrower in writing under O. Reg. 191/08, and the brokerage's own fee must specifically be included in that cost-of-borrowing figure and the annual percentage rate, not disclosed separately as an afterthought. The required disclosures must reach the borrower no later than two business days before the earlier of the relevant transaction events set out in O. Reg. 188/08, unless the borrower consents in writing to a shorter one-business-day window.

One specific rule worth knowing cold: on any mortgage with a principal of $400,000 or less, an Ontario brokerage cannot require or accept an advance payment or deposit for its services before they're rendered. Other provinces run their own version of these duties — B.C.'s conflict-of-interest and fee disclosure requirements sit under the Mortgage Brokers Act rather than Ontario's framework — so confirm the specific form and timing with BCFSA, RECA, or the AMF rather than assuming Ontario's rules apply outside Ontario.

Disclosure obligations extend beyond the borrower, too, in a private-lending file. When a brokerage arranges a mortgage with a private lender or investor, it generally owes that lender a separate written disclosure of its own, covering the risk profile of the deal from the lender's side. It's a good habit for a broker to think of a private-lending transaction as having two disclosure obligations running in parallel, not one — borrower-facing and lender-facing — even on files where only the borrower-facing side feels immediately relevant.

The practical takeaway for a broker explaining a quote to a client: separate the 'why is this what it costs' conversation from the 'here's exactly what it costs' conversation. The first can happen early, in plain language, based on the structure described above. The second can only happen once the lender's actual commitment is in hand and the brokerage's own fee has been finalized — conflating the two invites the client to hold the broker to an estimate that was never meant to be final.