Rates & fees

The true cost of a private mortgage: rate, fees and APR

Lenders Valley · September 10, 2026 · 5 min read

The rate on a private mortgage is only part of the price. Because private loans run for 6 to 24 months, one-time fees weigh far more than they do on a five-year bank mortgage. Here is how to add it all up.

The costs you'll see

Interest. Usually interest-only, charged monthly.
Lender fee. A one-time charge, commonly 1% to 3% of the loan, often deducted from the advance.
Broker fee. Paid to the brokerage that arranges the loan. It must be disclosed to you in writing.
Appraisal and legal. You pay for an independent appraisal and your lawyer; some lenders also pass on their own legal costs.

A worked example

A $100,000 private first mortgage at 9.99%, interest-only, 12-month term, with a 2% lender fee and a 1% broker fee:

Cost	Amount
Monthly interest payment	$832.50
Interest over 12 months	$9,990
Lender fee (2%)	$2,000
Broker fee (1%)	$1,000
Cost of borrowing for the year	$12,990

If both fees come out of the advance, you receive $97,000. Paying $12,990 for the use of $97,000 for one year works out to roughly 13.4%, well above the 9.99% headline rate. Appraisal and legal costs push it a little higher.

Compare on APR. Two offers at 9.49% and 9.99% can flip once fees are counted. Ask every lender for the annual percentage rate and total cost of borrowing in writing.

How to lower the total cost

Borrow at a lower loan-to-value where you can. Rates and fees usually step down below 65% to 70% LTV.
Choose the shortest term that fits your exit. A fee spread over 6 months costs more per month than over 12, so match the term to your real plan.
Ask whether the lender offers an open term, so you can pay out early without a penalty.

See current rates and fees

Every table on our rates page lists the lender fee next to the rate, so you can compare total cost at a glance. Ready to talk numbers? Request your options.