Private Mortgage Fees in BC
July 25, 2026 | Posted by: Alex Vinarski
Private Mortgage Fees Explained
When comparing private mortgages, many borrowers look only at the interest rate. However, understanding the fees associated with a private mortgage is just as important.
Here are the most common fees you should expect:
1. Lender Fee
Most private lenders charge a lender fee, typically 1% for 1st mortgage and 2% for 2nd mortgage of the mortgage amount. This fee is paid when the mortgage is funded and varies depending on the lender, loan amount, and overall risk.
2. Broker Fee
In most cases, a mortgage broker will charge a broker fee for arranging financing, as private lenders don’t pay to mortgage brokers. Usually lender’s lawyers collect broker’s fee alone with lender’s fee and send it to Brokerage of mortgage broker. The fee depends on the complexity of the transaction and will always be fully disclosed before your mortgage is finalized. Typically broker’s fee are the same as lender’s fee.
3. Legal Fees
A lawyer or notary is required to register the mortgage. Legal fees vary depending on the transaction and are separate from lender fees. In BC, borrower pay for two lawyers- own lawyer (or notary) and the lender's lawyer. Total cost around $2500-$4000
4. Property Appraisal
Pretty much all private lenders require an appraisal to confirm the current market value of the property. Appraisal costs around $350-$600 depending on the property's location and type.
5. Renewal Fee
Some private lenders charge a renewal fee if you extend your mortgage at the end of the term. Renewal fees vary widely—from $300 to 1% of the mortgage amount. This is why it's important to compare the total cost of borrowing, not just the interest rate.
6. Discharge Fee
When you fully pay off the mortgage, a lawyer must file a discharge to remove it from the title. Typical cost: The government filing fee is $75, plus legal fees for the discharge $250-$400.
Of all fees, only appraisal fee, and legal fee deposit are paid upfront. All other fees are deducted from new mortgage.
Important: No-Fund, No-Fee Rule
In British Columbia, brokers and lenders are not allowed to charge their fee if the mortgage does not fund. The appraisal fee (paid to the appraiser) is the only cost you may incur if the deal doesn't proceed. This rule protects borrowers from paying for a loan they never receive. Some lender’s might ask for legal fee deposit around $1000 to pay lawyers in case deal is not funded.
Key Questions to Ask Your Broker
Before committing to any private mortgage, ask these questions:
1. ”Can you provide a full, written breakdown of all fees (lender, broker, legal, appraisal) before I proceed?'
2.”Is the lender/broker fee deducted from the loan proceeds, or do I need to pay it in cash?'
3.”What are the renewal fees and potential rate increases if I need to extend the term?'
4.”What is the required legal fee deposit, and when is it due?'
Choosing the Right Private Mortgage
The lowest interest rate doesn't always mean the lowest overall cost. A mortgage with a slightly higher rate but lower renewal fees may save you money if you expect to keep the mortgage for several years.
An experienced mortgage broker can compare multiple private lenders and help you choose the option that offers the best overall value for your situation.
More information on private mortgages here:https://www.ipotekacanada.com/index.php/private-mortgages
