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A lender fee is a charge a lender bills directly to the borrower, separate from any commission the lender pays the brokerage. It typically covers file setup, administration, or a specific underwriting exception, and is more common on alternative and private mortgages than on conventional insured lending.
A finder’s fee is paid by the lender to the brokerage and does not come out of the borrower’s funds. A lender fee is the opposite direction — charged by the lender to the borrower, usually added to or deducted from the mortgage advance at closing.
Lender fees are more common with B-lenders and private lenders, where a fee may reflect higher-risk underwriting, a shorter timeline, or a specific exception made to fund the file, than with conventional insured lending from an A-lender.
Disclosed as part of the cost of borrowing: lender fees charged to the borrower form part of the total cost of credit that federal cost-of-borrowing disclosure rules require lenders to set out clearly.
More common outside conventional insured lending: insured, A-lender mortgages typically carry few or no lender fees, while alternative, B-lender, and private mortgages more often include one.
Separate from government and closing costs: a lender fee is charged by the lender itself and is distinct from third-party closing costs such as land transfer tax or legal fees.
Should be confirmed before commitment: because lender fees vary widely by lender and file, borrowers confirm the exact amount from the commitment letter rather than assuming a standard rate.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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