Private Mortgage Refinance in Ontario: Fees to Expect and Red Flags

Short answer: a private refinance can buy you time when a bank won't approve you, but it's one of the most expensive ways to borrow against your home. Fees alone can run to many thousands of dollars before you count the higher interest rate. Before you sign anything, confirm your agent's licence on FSRA's registry, get every fee in writing, and know exactly how you'll get out at the end of the term.

This month, a regulator enforcement case in Ontario made headlines. It involved a senior homeowner whose private refinance, according to news reports of FSRA's allegations, carried about $47,000 in fees on a roughly $425,000 loan, and the home was later sold ^[8][9][13]. The allegations haven't been proven, and the case is still before the regulator's process. Whatever the outcome, the case is a reminder of what to check before you sign.

8Twelve does not fund private mortgages. As a licensed brokerage, we arrange mortgages through 65+ lenders, and we always look at lower-cost options first.

When does a private refinance make sense?

According to FSRA, private and alternative mortgages are for borrowers who can't qualify with a bank or credit union. They're meant to be temporary, typically one or two years, until you can qualify for something cheaper. Private lenders often lend based on your property value rather than your income, and many loans are interest-only, so your balance doesn't go down ^[2].

Reasonable uses include bridging to a planned sale, clearing urgent arrears or tax debt while you rebuild credit, or covering a gap while new self-employed income builds a track record. In every case you need a realistic way out.

Private mortgage refinance fees in Ontario: what to expect

Private loans aren't standardized, and FSRA notes that fees are often higher than with a traditional mortgage ^[2]. Here are the cost layers to ask about. The dollar ranges are 8Twelve's general market observations, not regulator figures. Your quote will vary, which is exactly why it must be itemized in writing.

*Illustrative ranges from 8Twelve's market experience, not published by FSRA or any regulator. Get a written quote.

Do the math. On a $400,000 private refinance, a 2% lender fee ($8,000), a 2% brokerage fee ($8,000) and about $3,000 in combined legal and appraisal costs add up to roughly $19,000, close to 5% of the loan, before interest. In the case reported this month, the alleged fees were about 11% of the loan ^[8].

Your rights in Ontario: a mortgage brokerage must give you a written disclosure statement in plain language. For a fixed-rate loan it must show: - the cost of borrowing in dollars - the APR - every payment - any brokerage charges included in the loan - the discharge charge - the nature and amount of every non-interest charge

You must receive it at least two business days before you make a payment, sign, or take on any obligation, unless you waive that in writing ^[3]. FSRA has also warned brokers that disclosing the APR alone isn't enough: every fee must be named and labelled clearly, and renewal fees can't be buried in fine print ^[4].

Not sure a private loan is your only option? See how a refinance or equity takeout could work, compared across 65+ lenders. Refinancing options · Equity takeout

Red flags before you sign a private refinance

Most of these come straight from FSRA's consumer guidance ^[2][5]: - Fees demanded before closing. FSRA specifically tells borrowers to watch for this. - No written, itemized disclosure. Watch for "see commitment" with no numbers, or a disclosure handed over the day you sign ^[3][6]. - You're being rushed or discouraged from having your own lawyer review the documents. - The loan is based only on your home's value, with no discussion of whether you can afford the payments. - The exit strategy isn't realistic. FSRA's example is a plan that depends on doubling your income in six months. - Your application overstates your income, job or assets. Read everything submitted in your name. Misrepresentation can void the deal and hurt you. - Power of sale starts very quickly after a missed payment, or there are heavy default charges. - No explanation of why cheaper options were ruled out. FSRA expects brokers to explain why you need a private mortgage rather than a prime or alternative lender ^[2]. - Conflicts of interest aren't disclosed. For example, the broker or a related party is also the lender. Brokers must disclose conflicts ^[5]. - They won't show proof of errors and omissions (E&O) insurance. Licensed brokerages are required to carry it.

From our desk: The question I want every borrower to ask is: what does this cost me in total, and what's my plan in month 12? If nobody can answer both in writing, don't sign.

How to check a mortgage broker's licence in Ontario (step by step)

1. Open FSRA's public registry: go to https://mbsweblist.fsco.gov.on.ca/agents.aspx. FSRA links to it as its "Searchable Listing" from the Licensing Link page ^[7].

2. Choose what to search: select "Agents or Broker" for a person, or "Mortgage Brokerage" for the company. Check both.

3. Search by licence number or the agent's last name. You can add the city to narrow results.

4. Confirm the details:

5. The name matches their business card and paperwork.

6. The licence class is right. Only a Mortgage Agent Level 2 or Mortgage Broker can arrange private mortgages. A Level 1 agent can't ^[10].

7. The brokerage shown matches the brokerage on your documents.

8. Agent and broker licences run for one-year terms, so make sure the licence is current ^[7].

9. Search FSRA's enforcement database at https://teao.fsrao.ca/ ^[1] for both the person's name and the brokerage's name. Then scan FSRA's announcements for recent actions.

10. If something's wrong, contact FSRA, or follow FSRA's complaint process at https://www.fsrao.ca/submit-complaint-fsra. FSRA generally asks you to raise the issue with the brokerage first.

A valid licence is the starting point, not a guarantee. That's why the written disclosure and your own lawyer matter.

What to have ready before you talk to any lender

Being organized gets you a faster, more honest answer and makes it harder for anyone to "fill in" your application for you. Gather:

• Your current mortgage statement, including the balance, rate, maturity date and any prepayment penalty estimate (ask your lender for a written payout figure).

• Proof of income: recent pay stubs and a job letter, or, if you're self-employed, your last two years of Notices of Assessment and T1 Generals.

• Property documents: your latest property tax bill and home insurance policy, plus condo fee statements if they apply.

• A list of every debt you want to pay off, with balances, interest rates and minimum payments.

• The reason the bank said no, in writing if you can get it. A broker can only match you with the right lender if they know whether the issue was credit, income, debt ratios or the property.

Keep copies of everything you sign and everything submitted in your name. If an application ever lists income, assets or employment that aren't yours, stop and ask why before going any further.

Bank declined your refinance? What to try first

If debt is the reason, see our debt consolidation and HELOC pages.

Your exit plan: questions to ask before signing

• What has to change for me to qualify with a bank or B-lender at the end of the term: credit score, income documents, debt balances?

• What will it cost to renew if I'm not ready? FSRA treats a renewal as a new transaction that needs a fresh suitability review ^[4].

• What's my backup plan, such as selling, downsizing or bringing in a co-borrower?

A private refinance should be a short, planned bridge, not a trap. Verify the licence, insist on an itemized written disclosure, bring your own lawyer, and don't sign until you can explain the total cost and the exit plan.

Compare the monthly cost of your options. Open the debt consolidation calculator

This article is for general information only and isn't financial, legal or tax advice. Rates, products and terms change without notice and are available on approved credit (OAC). The rate and terms you qualify for depend on your individual financial situation, including credit, income, property and loan-to-value. "Best rates" means the most suitable options available for your situation, not a guarantee of the lowest rate. Example rates and payments are for illustration only, as of October 2026, and are not an offer. 8Twelve Mortgage arranges mortgages through 65+ lenders and does not lend directly. Licensed across Canada — see our licences.

8Twelve does not fund second or private mortgages; we arrange them with third-party lenders where suitable. Private mortgages carry higher costs, and all lender and brokerage fees must be disclosed to you in writing before you commit. The enforcement case referenced involves allegations that have not been proven.