Short answer
The final cost can include a lender discharge or administration fee, legal or notarial work, land-registration charges and, if the mortgage is repaid early, a prepayment penalty. Ask for an itemized estimate before choosing the transaction date.
The client concern behind the question
The client budgets for the mortgage balance but the lawyer’s statement of adjustments contains several additional charges, reducing sale proceeds or refinance funds.
What the verified rule or guidance says
FCAC identifies professional fees, discharge fees and possible prepayment penalties as separate costs. Amounts vary by province, lender, mortgage type and professional work required. A fee charged by a lender is not the same as the government registration charge or the lawyer’s fee.
What it does not guarantee
A lender quote can change with the payout date because daily interest continues. A mortgage at maturity may avoid an early-break penalty but still have discharge and legal costs. Alternative, MIC and private mortgages can have additional payout, renewal or discharge terms in their commitments.
A practical Ontario example
Illustration only: A homeowner switches lenders exactly at maturity and avoids a prepayment penalty. The file still includes legal registration, a lender discharge fee and an appraisal. The switch remains worthwhile only if the interest and product savings exceed all transaction costs.
Practical steps to consider
Request a written payout statement for a realistic closing date and ask the new lender which transfer, legal and appraisal costs it may cover. Compare the net dollars over the expected holding period rather than treating “no penalty” as “no cost.”
Questions to ask before deciding
- Which statement is law or regulator guidance, and which part is the lender’s own policy?
- What are the complete costs today, at renewal and at the expected exit?
- What documents, dates or property facts could change the answer?
- Would an A, alternative/B, MIC or private lender view the verified file differently?
- What is the backup plan if the preferred route is declined or delayed?
Rajiv’s broker perspective
A useful answer must solve the client’s real concern, not repeat a definition. I would verify the documents and timeline, separate regulator requirements from lender policy, then compare the available routes in dollars. A conventional A lender may offer the lowest cost when the file fits. An alternative/B lender may use a broader income or credit approach. A MIC or private mortgage may provide short-term flexibility, but fees, interest, term and the exit must be clear. The right recommendation is the one the client can carry and exit safely.
Related: Mortgage declined? Start here · Mortgage Knowledge Centre · Updates & Rules Centre
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