Compensation Disclosure

Newcastle Financial Corporation ("Newcastle Financial", "we", "us", or "our") is a licensed mortgage brokerage in Ontario (FSRA Brokerage Licence No. 13522). As required under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (Ontario) and Ontario Regulation 188/08, we are required to disclose to you how we and our mortgage agents are compensated, any potential conflicts of interest, and your rights in connection with that compensation.

We are committed to transparency. If you have any questions about any aspect of our compensation at any stage of your mortgage transaction, please ask us — we are happy to explain.

1. How We Are Typically Compensated — Lender-Paid Commissions

In the majority of residential mortgage transactions, Newcastle Financial and its mortgage agents are compensated directly by the lender — not by you, the borrower. This compensation is commonly referred to as a finder's fee or lender commission.

The finder's fee is paid by the lender upon the successful funding of your mortgage. It is typically calculated as a percentage of the mortgage amount funded. Commission rates vary by lender, mortgage product, and term length, and are set by each lender according to their own policies.

Because the lender pays our commission, our brokerage services are provided to you at no direct cost in standard residential mortgage transactions. You do not pay us a fee simply for arranging a mortgage with an institutional lender.

In addition to finder's fees, lenders may also pay volume bonuses, trailer fees, or other incentives based on aggregate business volumes. Where applicable, these arrangements are disclosed to you.

2. Circumstances Where Fees May Apply to Borrowers

While most standard residential mortgage transactions involve no borrower-paid fees to Newcastle Financial, there are circumstances where a fee charged directly to the borrower may apply. These include, but may not be limited to:

• Private and alternative lending arrangements: Mortgages placed with private lenders or non-institutional lenders (e.g., Mortgage Investment Corporations) often do not pay lender commissions, or pay lower commissions that do not reflect the full scope of work involved. In these cases, a brokerage fee may be charged to the borrower. This fee will be disclosed to you in writing before you proceed.
• Second mortgages and home equity loans: Certain second mortgage or home equity transactions may involve borrower-paid fees, particularly where private lending is used.
• Complex or non-standard applications: Situations involving significant research, credit restructuring, or other services beyond standard mortgage placement may, in some cases, attract a fee. Any such fee will be agreed upon and disclosed in writing in advance.
• Lender fees: Lenders themselves may charge fees directly to borrowers (such as appraisal fees, application fees, or commitment fees). These are lender fees — not Newcastle Financial's fees — and will be disclosed as part of the mortgage commitment.

We will never charge you a fee without first providing you with a clear written disclosure of the amount, the basis for the fee, and your right to decline. You will not be obligated to proceed.

3. Potential Conflicts of Interest

Because different lenders pay different commission rates — and because some lenders pay volume incentives or other compensation — there is an inherent potential conflict of interest in any commission-based brokerage model. Specifically:

• Varying commission rates: A lender that pays a higher commission rate could, in theory, be favoured over a lender offering better terms for the borrower. We are aware of this risk and actively work to ensure it does not influence our recommendations.
• Lender relationships: We maintain relationships with over 40 lenders, including banks, credit unions, trust companies, and private lenders. While these relationships are beneficial in securing competitive rates, they may also create an expectation of ongoing referral business that could influence recommendations.
• Volume bonuses: Certain lenders offer bonus compensation once a brokerage reaches a certain volume threshold. This creates a potential incentive to prefer those lenders toward the end of a bonus period.

How we manage these conflicts: Our mortgage agents are bound by a duty to act in your best interest as required under Ontario law. We manage conflicts of interest by:

• Recommending mortgage products based on your specific needs, goals, and financial situation — not on the commission we receive
• Providing you with information about the mortgage products we recommend, including their terms, costs, and features
• Disclosing any material conflict of interest to you before completing a transaction
• Maintaining oversight at the Principal Broker level to ensure compliance with our obligations to clients

4. Your Right to Know — Requesting Full Compensation Details

You have the right to request full details of the compensation Newcastle Financial and your mortgage agent will receive in connection with your mortgage transaction. This includes:

• The identity of the lender paying the commission
• The amount or estimated amount of the commission or finder's fee
• Any other compensation, incentive, or benefit received in connection with your mortgage
• Any fees that will be charged directly to you, if applicable

You may request this information at any point before or during your mortgage transaction — including before you sign any documents or commit to a lender. We are required by law to provide this disclosure, and we will do so promptly and in writing upon request.

Your decision to proceed with a mortgage recommended by Newcastle Financial is always voluntary. You are under no obligation to use our services or to proceed with any particular lender or mortgage product.

5. Regulatory Framework

Newcastle Financial Corporation operates under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (Ontario) and is regulated by the Financial Services Regulatory Authority of Ontario (FSRA). Compensation disclosure obligations are set out in Ontario Regulation 188/08 (Mortgage Brokerages: Standards of Practice). If you have concerns about our compliance with these obligations, you may contact FSRA directly at fsrao.ca.