Hidden costs of a commercial loan: the list to ask for

Why the rate does not tell the whole story

The interest rate is the number everyone compares. It is not the total cost of the loan.

Around the rate, the lender and outside parties charge fees. Some are paid before you even get an answer. Others come back every year.

This guide names the most common items. It gives no amounts, because they vary by lender, property and application.

Fees paid before the decision

The first item is often the application fee. According to BDC, a commercial mortgage carries an initial application fee.

Third-party costs follow. BDC mentions appraisal fees, legal fees and sometimes survey fees.

• The application or underwriting fee, paid to the lender
• The property appraisal, ordered by the lender but paid by the borrower
• A survey, when the lender requires one
• The notary’s fees for the deed of hypothec and its registration
• The cost of registering and later discharging the security

Ask whether these fees are refundable if the lender declines. The answer differs from one lender to another.

The notary is a separate item. The notary checks the title to the property, drafts the deed of hypothec and registers it in the land register.

The notary’s fees and registration costs are not in the rate. Ask for a written estimate before signing, then compare it with the final figure.

On a purchase, the buyer’s transaction costs come on top of the down payment. Build them into your starting budget rather than discovering them at the signing. The same goes for a refinancing: the costs are due at closing, even when the loan itself funds later.

Costs tied to loan insurance

Some loans are insured by CMHC. In that case, an application fee and a premium are added.

CMHC publishes its application fees and premiums in a separate document, not on each program page. Read that document instead of relying on an estimate.

Costs that come back every year

BDC says the annual costs of a commercial mortgage are often 0.5% to 1% of the loan amount. That is a rough range from BDC, not a price list.

These recurring costs do not show up in the rate. They still add up from year to year.

• Loan administration or monitoring fees
• Periodic property inspection fees, if the contract provides for them
• Insurance premiums the lender requires on the property

Tell the lender you want the yearly total, in dollars, for the whole term.

A cost is not always yours alone. According to FCAC, the new lender may cover part of the transfer fees. That is negotiable, but only if you ask.

Think about the loan insurance premium too. When you change lenders, FCAC advises giving the new lender your existing insurance certificate number. That way you avoid paying twice.

A premium can also apply if the loan amount rises or the amortization is extended, according to FCAC.

Ask who pays each item when the lender changes its mind. A decline after the appraisal is ordered can leave you with the bill. A withdrawal on your side can do the same.

Costs that appear mid-term or at the end

The Financial Consumer Agency of Canada (FCAC) pages cover loans to individuals. The items they describe still turn up in commercial loans.

When a loan is broken or transferred, FCAC lists administration, appraisal and reinvestment fees. It also lists a discharge fee, which removes the old hypothec, and a fee to register the new one.

When you change lenders, it adds transfer or assignment fees. It also notes that the new lender may cover part of them.

BDC also notes that some commercial loans are call loans: the lender can demand repayment at any time. A call loan changes the risk, not only the cost.

Limits on early repayment count as a cost too. BDC lists them among possible fees. The guide on prepayment penalties explains them in detail.

FCAC lists one last item: repayment of cash back. If the lender paid you a sum at signing, it may claim that sum back if the contract is broken.

FCAC states that federally regulated lenders show privileges and penalties in an information box at the start of the agreement. Look for that box before you read the rest.

How to ask for the list

Ask in writing, before you sign the commitment letter. A written answer can be compared. A spoken answer gets forgotten.

• Which fees are paid before the decision, and which are refundable?
• Which fees are added when we sign at the notary’s office?
• Which fees come back every year?
• Which fees apply if I repay early or change lenders?
• Which insurance is required, and from whom?

Set the answers side by side for each offer. The loan that costs most on paper is not always the one with the highest rate.

What to do next

Before signing, read the commitment letter line by line. Underline every fee whose amount you do not know.

Ask the lender or the notary for that figure by email. Keep the reply with your application.

PMECAP is a free comparison site. It explains financing types and passes your request to a mortgage brokerage registered with the AMF. It does not lend and does not display rates. The commercial financing and refinancing guides walk through the steps of a application.

FAQ

Sources

• BDC : prêt hypothécaire commercial (glossaire) (accessed October 13, 2026)
• ACFC : renouveler son prêt hypothécaire (accessed October 13, 2026)
• ACFC : rompre son contrat hypothécaire (accessed October 13, 2026)
• SCHL : assurance prêt pour habitations locatives modulaires (frais et primes) (accessed October 13, 2026)