Private mortgage costs, in three buckets — and the disclosure rules attached to each.

For the lender and brokerage pieces specifically, see how B-lender pricing is actually structured — the same rate-premium-plus-fee pattern generally applies on the private-lender side of the market too.

Where private deals diverge from B-lender pricing is mainly in the legal bucket, which is often thin or nonexistent on a bank file and consistently material on a private one. A borrower comparing a bank quote to a private quote side by side, without accounting for the legal difference, will consistently underestimate what the private option actually costs to close — which is exactly why walking through all three buckets together, rather than quoting the rate alone, matters.

It's worth walking a client through all three buckets even on a file where the lender and broker costs are relatively modest, because the legal bucket alone can be the deciding factor in whether a private mortgage actually makes financial sense for that specific purpose. A client borrowing a small amount to cover a short-term gap may find that legal and registration costs represent a much larger share of the total cost than they would on a larger loan, simply because several of those costs are closer to fixed than proportional to loan size.

On a bank mortgage, the borrower typically covers only their own lawyer. On a private deal, it's common for the borrower to also cover the lender's legal costs, since the private lender is bearing more of the deal-specific risk and passes its legal review costs on. Independent legal advice is a recommended safeguard on many private files, and is specifically required by regulation for reverse mortgages arranged through a mortgage brokerage — a useful reference point for how seriously regulators treat legal review on higher-risk mortgage products generally.

Title insurance and registration costs add a further layer, particularly on a second mortgage where a title search has to confirm exactly what's already registered against the property before the new charge can be placed. None of this is unusual or a sign something has gone wrong with the file — it's simply the standard legal footprint of a transaction with two lenders, or a single lender operating outside the standardized process a bank's in-house legal team runs on every file.

A borrower's own lawyer, in a private-lending context, is also doing more than a routine closing review. Reviewing the actual repayment terms, any prepayment penalty structure, and what happens specifically if a payment is missed is exactly the kind of independent legal advice FSRA points to as a genuine protection, not a formality — and it's a step worth encouraging even on files where it isn't strictly mandated by regulation.

Under O. Reg. 191/08, the cost of borrowing — including the brokerage's own fee — must be disclosed to the borrower in writing, expressed in plain language and presented clearly rather than buried in boilerplate. Under O. Reg. 188/08, that disclosure must reach the borrower no later than two business days before the earlier of the relevant transaction events, unless the borrower signs a waiver shortening the window to one business day.

One rule worth flagging specifically: 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. It's a rule that matters disproportionately on smaller private deals, where an upfront fee request would otherwise be easy to justify to a motivated borrower.

Estimates are allowed inside these disclosures, but only where a reasonable assumption genuinely can't be avoided, and the brokerage must clearly flag in writing that a figure is an estimate rather than a confirmed cost. That distinction matters in a private-lending file more than most, since legal costs in particular often aren't fully known until the lender's lawyer weighs in — the disclosure needs to say so plainly rather than presenting an estimate as a final number.

Every disclosure requirement, however, is written for the borrower's benefit, and the material-risk disclosure obligation runs alongside the cost disclosure, not instead of it. A brokerage must separately obtain written acknowledgement that risk disclosures were provided, on top of the cost figures themselves — two distinct signed records, not one combined form that covers both.

• →A written cost-of-borrowing statement that separates lender costs from brokerage costs, not a blended total.
• →An itemized fee breakdown the borrower can actually reconcile against the commitment letter.
• →A signed borrower acknowledgement that the disclosure was received, within the required timing window.
• →A retained copy of every disclosure document in the compliance file, not just the signed mortgage instrument.

This is exactly the kind of paperwork discipline that separates a file that closes cleanly from one that stalls on a compliance question. Treadstone's fulfillment associates build this disclosure package as a standard part of assembling a private-lending file, not as an afterthought.

One habit worth building into every private-lending file: reconcile the disclosure statement against the final commitment letter and the closing statement of adjustments before the file is considered done, not just at the moment of signing. Fees occasionally shift between commitment and closing on a private deal in a way they rarely do on a bank file, and catching a discrepancy before funds change hands is a far better outcome than catching it after.

Clients also remember how costs were explained more than the exact figures themselves. A borrower who was walked through all three buckets at the outset, and can see the final numbers land close to what was described, comes away trusting the process even if the total was higher than a bank mortgage would have cost. A borrower who only learns the full picture at closing rarely has that same reaction, regardless of whether every individual disclosure was technically compliant.

It's worth remembering, too, that these three buckets aren't static across the life of the mortgage. A renewal, a lender-approved extension, or an early payout can each trigger their own fees under the original commitment's terms, and those figures deserve the same clear, written treatment as the original disclosure — a client who understood the closing costs but is blindsided by a discharge or renewal fee a year later has a legitimate complaint, even if the original file was handled correctly.