What’s in a Mortgage Disclosure?

When you’re about to sign your mortgage, one document matters most: your mortgage disclosure. This isn’t just more paperwork; it outlines the key costs, terms, and conditions tied to your loan.

If you’ve ever wondered what’s in a mortgage disclosure, you’re not alone. It’s required by law in Canada, with extra protections here in Ontario, and it’s meant to keep things transparent and fair.

In this article, I’ll explain what’s inside the disclosure, how to read it, and what red flags to watch for.

What Is a Mortgage Disclosure?

A mortgage disclosure is a legal document that outlines the key details of your mortgage, including your loan amount, interest rate, payment schedule, and any fees or penalties. In short, it tells you exactly what you’re signing up for.

Lenders and mortgage brokers in Canada are required by law to provide this document so you can clearly see the full cost of borrowing. That means no hidden fees, no confusing clauses.

One of the most important features is the “information box.” This is a standardized summary at the top of the document that highlights:

• Your interest rate
• Amortization period
• Total loan amount
• Payment frequency and amount

While the layout can vary slightly between lenders, the core sections are always the same. This is true whether you’re dealing with a big bank, a credit union, or an alternative lender.

Ultimately, your mortgage disclosure is there to protect you, and taking the time to review it carefully is one of the smartest steps you can take.

Breaking It Down: What’s in a Mortgage Disclosure

When you receive your mortgage disclosure, it can feel like a lot to take in. But once you know what to look for, it becomes much easier to understand. Here’s a plain-language breakdown of the key items you’ll always find in a mortgage disclosure.

The 8 Things Always Found in a Mortgage Disclosure

1. Loan Amount and Term
2. Interest Rate and APR
3. Payment Schedule
4. Amortization Period
5. Fees and Additional Costs
6. Prepayment Rights and Penalties
7. Default Terms
8. Broker or Lender Compensation

1. Loan Amount and Term

This section shows how much you’re borrowing and for how long. The loan amount is the principal. The term is the length of this specific mortgage contract, usually 1 to 5 years.

2. Interest Rate and APR

You’ll see both the interest rate and the APR (annual percentage rate). The interest rate is what you’re charged for borrowing. The APR includes additional costs like fees, giving you a more complete picture of the true borrowing cost.

3. Payment Schedule

This outlines how often you’ll make payments (weekly, biweekly, or monthly), how much each payment will be, and the total number of payments over the term.

4. Amortization Details

This shows how long it will take to fully pay off your mortgage, typically 25 to 30 years. It’s separate from the term and important for understanding long-term costs.

5. Fees and Additional Costs

This section lists any fees charged by the lender or broker. These may include:

• Appraisal fees
• Legal or notary fees
• Administration fees
• Discharge fees (for ending the mortgage early)

6. Prepayment Rights and Penalties

You’ll see whether you can make extra payments and how much you’re allowed to pay without penalty. It will also explain what happens if you pay off the mortgage early.

7. Default Terms

This outlines what happens if you miss payments. It includes the lender’s right to charge late fees or begin legal proceedings if the loan falls into arrears.

8. Broker or Lender Compensation

If a broker is involved, this section discloses any commission or referral fees they’re receiving, so you understand who is being paid and how.

Ontario-Specific Note: Variable Rate “Trigger Rate” Disclosure

In Ontario, lenders must also disclose the trigger rate for variable-rate mortgages. This is the point where your payments may no longer cover the interest, which could affect your amortization or monthly payment.

Federal Standards: How Lenders Across Canada Must Disclose Information

No matter where you live in Canada, federally regulated lenders must follow strict disclosure rules set by the Financial Consumer Agency of Canada (FCAC). These standards are designed to ensure that every borrower has access to clear, consistent, and complete mortgage information before signing.

Here’s what that means in practice:

• Standardized Information: All key mortgage terms must be presented clearly, using plain language. This includes interest rate, APR, amortization, fees, prepayment options, and default consequences.
• The “Information Box”: Lenders must include a summary table at the front of your disclosure. This allows you to review the most important terms at a glance and easily compare offers between lenders.
• Advance Disclosure: You must receive the disclosure before you’re legally bound to the mortgage. This gives you time to review, ask questions, and make an informed choice.
• Electronic Access: If you agree, lenders can send you the disclosure electronically. This makes it easier to store, print, or forward for legal or financial advice.
• Renewals and Amendments: If your mortgage is being renewed or modified, the lender must provide a new disclosure reflecting the updated terms.

These federal rules help create a level playing field for borrowers across the country. Anywhere in Canada, you have the right to see the same core information before making a decision.

Ontario’s Extra Rules (and How They Affect Your Disclosure)

In Ontario, you’re protected by federal disclosure laws, but you also benefit from additional provincial rules. These are outlined in the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) and two key regulations that add more detail around transparency and conduct.

Think of it this way: the federal rules are your foundation, and Ontario builds on top of that with added safeguards.

Here are the main Ontario-specific requirements that affect your mortgage disclosure:

Written Disclosure Before You’re Legally Bound

Mortgage brokerages must give you a written disclosure document before you’re obligated to move forward with a mortgage. This includes all terms, fees, and risks  in plain language.

More on this: FSRAO disclosure requirements

Accurate APR Calculation

Ontario regulation O. Reg. 191/08 outlines how the annual percentage rate (APR) must be calculated. This ensures consistency and accuracy so borrowers can compare mortgages on a level playing field.

Broker and Agent Conduct Obligations

Under MBLAA, brokers and agents must:

• Act honestly and with integrity
• Disclose conflicts of interest
• Explain all compensation and referral fees

These rules are enforced by Ontario’s financial regulator, FSRA.

Renewal and Amendment Disclosures

If your mortgage is being renewed or amended, brokerages must provide updated disclosures with the new terms again, before you commit.

If You’re Working With a Broker

In Ontario, working with a licensed mortgage broker (like me!) means you’ll receive:

• A Disclosure Form outlining key terms
• A Mortgage Suitability Assessment, showing why the mortgage fits your needs
• A Broker Compensation Disclosure, if I’m receiving a fee from the lender

How to Read a Mortgage Disclosure Like a Pro

Reading your mortgage disclosure might not be the most exciting part of buying a home, but it’s one of the most important. This document lays out your financial commitment — and understanding it can help you avoid surprises down the road.

Here’s how I recommend reviewing it:

• Go line by line: Don’t skim. Read each section carefully so you understand what you’re agreeing to.
• Check the APR: Make sure the annual percentage rate matches what you were quoted. This includes fees and is often the best measure of your true borrowing cost.
• Spot the fees: Look for any charges that weren’t discussed upfront, like appraisal, legal, or discharge fees.
• Understand variable rate terms: If you have a variable-rate mortgage, make sure the trigger rate and adjustment conditions are clear.
• Look for prepayment terms: Check how much you’re allowed to pay off early and what penalties apply if you go over that amount. 

When you understand what’s in a mortgage disclosure, you can catch issues before they cost you. I always encourage clients to ask questions because no detail is too small when it comes to protecting your money.

Common Red Flags to Watch For

Even with standardized rules in place, not every mortgage disclosure is crystal clear. Here are a few warning signs to watch out for:

• Missing or inconsistent APR: The APR should always be listed and match what was quoted.
• Vague language: Be cautious if terms like “may be subject to fees” are used without specific details.
• Undisclosed broker commissions: You have the right to know who’s getting paid and how much.
• High penalties: If the prepayment penalties seem unusually steep, ask for clarification.
• Unclear variable rate formulas: Make sure you know exactly how and when your rate could change.

Ask Before You Sign If…

• You don’t recognize a fee
• You’re unsure about how the rate is calculated
• The total cost seems higher than expected
• You feel rushed or pressured to sign

Renewal and Amendment Disclosures

Your mortgage disclosure isn’t just a one-time document. When your mortgage term ends (or if you make significant changes through a refinance or amendment) you’re entitled to updated disclosure documents.

• In Canada: Federally regulated lenders must provide a renewal disclosure that outlines the new interest rate, term, and payment details before your existing mortgage expires. This gives you time to compare options and renegotiate if needed.
• In Ontario: These rules go even further. Mortgage brokerages must also give you updated disclosures in writing before you accept the new terms. These documents should be just as detailed and transparent as the original.

Don’t assume that renewal terms are always in your favour. Even if you’ve been with your lender for years, it’s worth taking a close look at the updated disclosure or asking your broker (like me) to compare it against other offers.

Final Thoughts: Empowering Borrowers Through Understanding

Understanding what’s in your mortgage disclosure is more than ticking boxes; it’s critical to protecting your future. This document gives you a clear look at your loan, your rights, and your obligations, and it ensures that no surprises are buried in the fine print.

Whether you’re a first-time buyer or renewing your mortgage, I always recommend reviewing your disclosure closely and asking questions if anything feels unclear. No question is too small when it comes to your biggest investment.

If you’d like help reviewing your mortgage disclosure, or just want a second opinion on your mortgage terms, feel free to reach out. I’m always happy to walk you through it.