John, a mortgage agent in Toronto, is arranging a private mortgage for Brenda, who needs $100,000 to complete renovations on her investment property. The private lender requires a valuation fee, an administration fee, and a commitment fee. Which of these fees must be included in the cost of borrowing disclosure according to provincial regulations?

Question: John, a mortgage agent in Toronto, is arranging a private mortgage for Brenda, who needs $100,000 to complete renovations on her investment property. The private lender requires a valuation fee, an administration fee, and a commitment fee. Which of these fees must be included in the cost of borrowing disclosure according to provincial regulations?

Answer options:

• Only the administration fee and commitment fee.
• Only the valuation fee. ✅ All three fees: valuation, administration, and commitment fees.
• None of these fees are required for private mortgages.

Correct answer: All three fees: valuation, administration, and commitment fees.

Explanation: All fees charged by the lender, including valuation, administration, and commitment fees, must be disclosed as part of the cost of borrowing under provincial mortgage legislation (e.g., Ontario's MBLAA), as they are direct costs of obtaining the mortgage.