Direct answer
Often the borrower pays—but the written commitment controls the obligation
Private mortgage commitments commonly require the borrower to cover the lender’s legal costs as a condition of the loan, in addition to the borrower’s own legal bill. That is not a universal rule for every mortgage; the actual obligation and amount depend on the written commitment, legal work and transaction.
The borrower commonly pays the lender’s legal bill if the commitment says so
In Ontario private lending, it is common for the mortgage commitment to require the borrower to reimburse the private lender’s legal costs. The borrower also usually has their own legal costs for advice and closing work.
The amount should not be assumed from a previous transaction. The commitment and lawyer’s account govern the actual obligation, subject to applicable law.
The two lawyers protect different interests
The borrower’s lawyer explains the borrower’s obligations, completes borrower-side closing work and helps ensure the borrower understands the legal effect of the mortgage. The lender’s lawyer protects the lender’s security, reviews title and documentation and completes lender-side legal requirements.
A private lender may also require independent legal advice or separate representation depending on the facts. The exact legal representation rules are a matter for the lawyers involved, not a mortgage-cost assumption.
Lender legal fees can reduce the cash you actually receive
If the lender’s legal bill is deducted from the mortgage advance, the gross mortgage amount can overstate the funds available for the borrower’s purpose. If it is added to the debt instead, the borrower may owe more secured principal.
This is why a private mortgage quote should be converted into a net-proceeds statement showing existing payouts, lender fee, brokerage fee, both legal-cost estimates, appraisal and other required deductions.
Renewal, extension and discharge can create further legal costs
A new private term can require additional legal work, especially if documents are amended, a new charge is registered, priorities change or another lender becomes involved. A discharge or payout can also involve legal or administrative charges.
Before accepting a renewal, borrowers should ask for the new fee and legal-cost treatment rather than assuming the original closing expenses were one-time forever.
Confirm the legal-cost clause before committing
Ask who will represent the lender, whether the lender’s legal costs are capped or estimated, how unexpected title work is billed, whether the amount is deducted or capitalized and whether additional legal costs can arise if the mortgage does not close.
If a fee or contractual legal-cost obligation is unclear, obtain an explanation from the mortgage professional and lawyer before signing. FSRA emphasizes clear disclosure of private-mortgage fees and recommends independent legal advice where appropriate.
Evidence and factual governance
Sources and verification
This knowledge resource is governed by the primary or authoritative sources below. Sources were last checked on August 14, 2026. Product availability, lender policy and individual legal or tax consequences must still be confirmed for the actual transaction.