Mortgage Broker vs Bank – Who to Choose?

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You’re lookin’ to buy a place but don’t know whether to go with a Canadian mortgage broker or with a big bank, and you want to get the best mortgage rate & best deal possible (of course, what fool wouldn’t?).

Or maybe you’re already in the place of your dreams and just looking to get the best rate when your mortgage term expires.

Here’s the difference between the mortgage broker I eventually used and the big banks that I inquired into before making my decision.

Mortgage Broker

A mortgage broker is a professional who is a freelancing agent.  They go between the lenders and the borrowers (that’s you) and are paid a commission from the lenders for securing a good borrower.  They don’t work for anyone, they work for themselves and they compare the rates from dozens of lenders.  It’s important to remember that mortgage brokers are not actual lenders themselves. 

Think of them as connectors – they seek out people interested in borrowing for a home and fix them up with a lender that works best for their situation.  They can even go between you and the big banks for a mortgage (although there are usually cheaper options).  Mortgage brokers work by getting to know you, calculating what you could be approved for, sending your application, and discussing with you what would work in terms of a fixed or variable mortgage & fixed or closed term. Many people report they liked their mortgage broker because they can often get a better rate than if they went directly to a big bank.  I also know several people who say that the mortgage broker helped them get approved even though their credit history wasn’t so hot (possibly to their long-term detriment – but hey, it’s a free country).

Online mortgage brokers have quickly snagged a huge share of the mortgage broker market.  By allowing customers to easily browse the best rates from across Canada for their specific situation, online brokers allow you to look and compare options without any pressure sales tactics.  By operating online and cutting their margins to the bare minimum, they can pass along those savings to their customers.


Best Mortgage Rates Canada



Big Banks

When you go to one of Canada’s major banks for a mortgage they will usually have you sit down with a loan officer.  They’ll guide you through some of terminology involved with mortgages and make a recommendation to you based on what you tell them.  Big bank loan officers will usually negotiate with you if you play hardball. (Hint: the rate they post on their website and in their brick-and-mortar locations is definitely not their best offer). Loan officers usually get paid through some combination of salary + commission + bonuses, and they won’t ever recommend that you look elsewhere.  (Unlike a mortgage broker, loan officers have no real incentive to snag you the best deal possible – indeed, it’s sort of the opposite.)

So, who to choose?


Mortgage Broker or Big Bank


Mortgage Broker Pros:

  • They can meet you on your time – or if you go with an online broker they make it very easy to communicate via email, Skype, etc.
  • You get to see all of your options and are basically guaranteed to get the lowest rate possible.
  • Brokers often have more flexibility in terms of getting you approved with non-traditional lenders.
  • If full-contact negotiating isn’t your thing, have no fear, mortgage brokers will do the dirty work for you.
  • They will sometimes pay for things like inspections or appraisals out of their own pocket.  The idea here is that they wish to secure your loyalty for the long term so that you’ll go back to them for your next mortgage term, as well as recommend their services to others

Mortgage Broker Cons

  • The lenders that offer the best rates might not be in the same geographic location as you.
  • The lenders that offer the best rates are sometimes smaller.  This lack of familiarity scares some people (but doesn’t make any real difference in the long run).
  • You might not be able to sit down with the mortgage broker face-to-face.  Personally, this is a positive as I prefer to send an email anyway.
  • Some mortgage brokers might be motivated to approve you for a loan that you shouldn’t get approved for simply so that they can snag the commission.  In theory, a major bank that has access to your full financial picture might be able to give you more personalized and better advice in this area.  I’m not sure this actually happens very often in practice, but it is a relevant consideration.


Mortgage Broker or Big Bank


Big Bank Loan Officer Pros

  • Usually pretty flexible in adjusting to how you prefer to communicate, including face-to-face meetings.
  • Canada’s major banks operate coast-to-coast, so a brick-and-mortar location is almost never too far away.
  • You can use your mortgage as a big negotiating chip in your overall relationship with the bank.  In other words, you can demand free banking, a free safety deposit box, or other perks, in exchange for bringing a large part of your business over to them.
  • Banks will often pay the appraisal fee or some of the other closing costs.
  • Easy to work in a Home Equity Line of Credit (HELOC) into the deal.  These can be handy little tools, but can also get you in substantial debt trouble if you’re not careful.

Big Bank Loan Officer Cons

  • A higher interest rate on your mortgage (just a few tenths of a percentage point will mean thousands of dollars less in your pocket).
  • You only get to negotiate with one institution – meaning you don’t know what leverage you have because you don’t know what others are offering.
  • Getting a competitive rate involves shopping around and a time-consuming negotiating process that turns a lot of people off. 
  • Canada’s big banks have fairly specific rules about who they can extend a mortgage to. There isn’t as much flexibility as with a broker.

Finding the Right Mortgage Option for You

Because of how comfortable I am in the online world I lean heavily towards the online mortgage broker model.  You just can’t beat their combination of extremely low operating costs, dozens of options to choose from, and the ability to browse without being hassled or scared into something that isn’t in your best interest.  To my way of thinking, the rates posted on online mortgage comparison sites (such as the one below) have to be their best offer because they know consumers will be directly comparing it to everything else on the market – thus cutting out the tedious rounds of negotiating.

If a face-to-face relationship with an institution that you are familiar with is very important to you, I can see the appeal of sticking with one of Canada’s big banks.  If this is more your style, at least check out what the online mortgage folks are offering so that you know what numbers to start negotiating with.

And for goodness’ sake, don’t pull a “typical Canadian” and politely head down to your big bank at the end of every mortgage term and sign on the dotted line for the first mortgage rate they mailed to you.  Unfortunately, most Canadians are hesitant to engage in the aggressive tug-of-war that is needed to get themselves the best deal.  Banks love it when folks simply walk in, say they need to renew their mortgage – or that they are ready for the house of their dreams – and then sign on thinking that a few percentage points one way or the other can’t matter that much.

For most of us, our mortgage will be the biggest financial decision we ever make. Understanding how to save yourself a percentage point here or there can mean an extra trip with your family, a maxed-out RESP, or speeding up that retirement date by a couple of years.


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Young is a writer and former owner of Young and Thrifty and the main "twitter' behind Young and Thrifty's twitter account. She lives in Vancouver, BC and enjoys long walks on the beach, spending time with her anxious dog, and finding good deals. If you like what you read, consider signing up for email updates.


  1. heffer on July 21, 2010 at 8:32 am

    My philosophy is to shop around at both banks and brokers and then chose which ever party has the best deal.

    When I bought my first home last year, the most amount the mortgage brokers could preapprove me for was only $160K. My credit was fine, but the 32% housing cost ratio was my limiting factor. I didn’t have a lot of savings back then so there was no way I could get what I wanted, a 2 bedroom apartment. But fortunately a senior financial adviser at CIBC let me borrow over $200K. So I ended up getting the home that I wanted with only 5% down payment and a $215K mortgage. And the interest rate is the same as the broker’s offer. I couldn’t be happier.

    It appears the 32% and 40% rules are just guidelines, and exceptions are always made by senior personnel like this adviser. Mortgage brokers usually follow those rules because their lending partners don’t personally know the borrower, so they don’t want to take the risk. But individual lenders like banks can be more lenient if they meet with possible borrowers and decide that they have a strong sense of financial responsibility. Everyone is different. When it comes to affordability ambition speaks louder than percentages. So I like big banks for this reason. But I’m not a loyal client, as soon as my term expires in 3 years I will be on the hunt again for the best possible deal.

  2. 2hirondelles on July 21, 2010 at 9:08 am

    Broker, definitely. In Ottawa, I recommend Marie-France Lavigne at Dominion Lending Centres. She’s done well for me twice now, and once for my daughter as well. She knows her stuff, is efficient and has good availability and has good staff as well. I have learned a lot from her.

  3. 2hirondelles on July 21, 2010 at 9:09 am

    As an addendum: I have excellent credit, but using a broker saves me time, and I’m not the best arm-twister.

  4. young on July 21, 2010 at 7:35 pm

    @heffer- Thanks for sharing! That’s how I felt too, the big banks approved us for much more (though I wont’ be using that much!) and knew our histories etc. It also helps if you have family or friends who recommend you to the big banks, they usually can be a bit more flexible when they know you. Glad you got to get the home you wanted =)

    @2hirondelles- Thanks for sharing- hope Ottawians are reading this and contact her =) Yes, Dominion Lending is the big boy of the mortgage brokers- the one I talked to was from there too.

  5. Financial Samurai on July 21, 2010 at 7:46 pm

    I developed a relationship with my big bank, which has allowed me to leverage my status at the bank to get more credit. For example, if you are a “Citi Gold” client, you get an extra $500 credit off the lowest fees.

    You just need to go with someone you trust. And if you don’t trust nobody, then go with your big bank who will hopefully not screw you over. The lowest rate is the best.

    Also, if you have a loan approval app from a big bank, you look like a better candidate when it comes to buy.

  6. young on July 21, 2010 at 7:48 pm

    @Financial Samurai- that’s what I’m planning to do.. hopefully develop a relationship with the bank. Good know know that big banks have clout when it comes time to buy =)

  7. Maggie's Farmboy on July 21, 2010 at 8:19 pm

    I was actually surprised to read the conclusion of this post, which seems to suggest that the pros and cons between banks and mortgage brokers are somewhat even.

    Having been through both experiences, I can tell you that I have consistently found better mortgage rates through mortgage brokers. They are the experts, who generally are beholden to no bank, and they know where the best rates are.

    In my experience, mortgage brokers will give you two or three options, and let you choose the option that suits you. This suggests that their is no hidden agenda behind the mortgage being proposed.

    My last mortgage broker also had a far more sophisticated understanding of the interest rates than did my bank’s mortgage specialist.

    I would recommend Rob McLister in Vancouver ( I used him even though I am in Ottawa. And no, I don’t work for him nor am I related to him in any way.

  8. young on July 21, 2010 at 9:02 pm

    @Maggie’s Farmboy- Thanks for sharing your experience. I really do believe that the pros and cons between mortgage brokers and banks are somewhat even.. it really depends on whether you are considered to have a good credit rating, relationship etc. for a big bank to give you a good rate and to work with you. The mortgage brokers do get commission, even though they have no hidden agenda. Canadian Mortgage Trends is a great resource, thanks for sharing (I forgot to mention them!).

  9. Financial Cents on July 22, 2010 at 9:04 am

    Good post, I like the pros and cons part. I have always used my big bank to negotiate (I got good discounts) but I’m leaning towards using a broker next time. Observing and hearing from others, I’ve heard some mortgage brokers really go to war for you…and that’s a great thing. Unless you get a very competitive rate from your big bank, go with a broker.

    Here is a great site to get started:

    Disclaimer, I don’t work for them; don’t advertise for them, I’m just sharing 🙂

  10. Jenn on July 22, 2010 at 3:26 pm

    Just a note on broker commissions – we bought our first place last year, and our broker got a set commission from the lender regardless of the mortgage amount, so we were not pushed to go for more than we felt comfortable with.

  11. young on July 22, 2010 at 10:15 pm

    @Jenn- thanks for clarifying =) Most mortgage brokers won’t approve you for more than a bank would. I find the big banks to be more lenient with the mortgage amount, whereas mortgage brokers are more cognizant of the maximum mortgage that one should feel comfortable with.

  12. young on July 22, 2010 at 10:17 pm

    @Financial Cents- Thanks! You know I love pros and cons lists. =) That’s good if you can find a broker who will really advocate for you- just like many salespeople there some really good ones (who will pay for a lot of your closing costs) and some bad ones (who are just their for the money). Rate Supermarket is really good- they’re very objective and you can check the rates that are available nationwide.

  13. Financial Samurai on July 28, 2010 at 11:06 pm

    Also, you might want to check Citimortgage. They are seriously expanding their loan book now and are pricing 25-50bps below the competition!

  14. young on July 29, 2010 at 12:17 am

    @Financial Samurai- Thanks for the heads up- though I’m not sure if they have citimortgage here up north..!? Good deal though!

  15. TinyPotato on July 31, 2010 at 12:26 pm

    I recommend going with a broker. In addition to the benefits described above, the broker will most likely only obtain one credit report and reuse it at all banks.

    If you shop around yourself you end up with several credit inquiries (a separate credit check from each bank) which can slightly impact your score.

  16. Bambino on February 13, 2013 at 2:26 am

    I realize this is an old post, But you say mortgage brokers are getting a comission, from the lender they use. Are the people who work at the bank not getting a paycheck? Would money not be a factor to both parties? More often than not the banks pay the broker a fee, so they dont have to pay for a building and a whole bunch of employee salaries. Brokers are looked at as a cheaper option, for the lenders. So forking over 2500 dollars for a deal, when the broker assume s all expenses, and risks doesnt sound that biased to me. Banks also represent themselves, Brokers represent the borrower, going to a broker is like getting someone to negotiate with a used car salesman for you, at no cost to you. Going to a bank is like fending off the car salesman your self when you know nothing about cars. That is just my opinion.

  17. Brownbrady on April 4, 2013 at 11:14 am

    Shopping for a mortgage by yourself will cost you 1 credit check for each bank which we all know can negatively affect your credit score. Going through a broker only costs you 1 credit check and 1 phone call or visit.

  18. Teacher Man on April 4, 2013 at 7:02 pm

    All you really need is the advertisements at other banks Brownbrady. The other bank/lender can’t possibly verify if you’re bluffing or not. These places all know the competition is heating up in this low-interest environment.

  19. Johnnybroker on April 7, 2013 at 9:43 am

    Hi Liked your article, just have a few comments to make

    1. Never shop for the a mortgage based on rate as a discount of .15 or .2 % percent will not make you a millionaire, always looks what is the prepayment terms, penalties, portability etc.

    2. While shopping for a broker look for affiliations such as AMP (Accredited Mortgage Professional) designate and how long the person has been in the business as if you do have a problem you can actually complain to CAAMP the governing body who can investigate your complaint if any.

    3. For First time home buyers always try to work out an actual cash flow analysis before going in to buy a house. Like you said in your article “sometimes getting approved for more than expected can be a bad thing”

    4.Always, watch out for brokers trying to push mortgages from an unknown lenders, always demand for more than one quote compare the apples to apples not apples to oranges. Brokers might sweeten the pot with one deal as they could be getting a bigger commision from that lender ( It does happen ! don’t rule it entirely out)

    Getting a good broker coud also be an art, try to go by a referral if possible.

  20. Teacher Man on April 7, 2013 at 7:10 pm

    Hey Johnny, here’s my response:

    1) Not millions by 10s of thousands which is enough for me to worry about! Obviously the prepayment, penalties etc, are important, but each individual situation will determine what is most important.

    2) I have little faith in any self-regulatory body.

    3) Definitely agree

    4) For sure.

  21. ACruz on August 5, 2014 at 10:17 am

    Hello all:

    It really saddens me to read articles like these. While I am a very open to both sides, and yes, I am a licensed mortgage broker in Alberta, there are too many items to correct in your article.

    What I would like to say is the following:

    1) Yes, you should shop around. But please bare in mind that it is not the interest rate that is the most important, but rather the product (rate+lender+terms+amortization+etc).

    2) When you do shop around on your own at each of the “big” banks, not only is it it “1 credit check” each, but it does cost you a hard credit check, which means your beacon score is reduced by 10pts each time.

    3) Not all mortgage specialist (big banks) or mortgage brokers are good OR bad. Word of mouth – referrals are the best way to source the individual you should be interviewing. After all, regardless of who you go with, they are working for you.

    4) In Alberta (like most some provinces but not all), the rules are much more stricter for mortgage agents. For example,

    (a) I have to be in good standing and renew my licensed each year.
    (b) If I have a client that is unhappy with my work and we cannot fix it, the client goes to the next step up – my broker, who is ultimately held responsible as well.
    (c) If my broker (who is responsible for all agents in his brokerage) cannot solve an issue, and if it violates the Real Estate Act (of Alberta), than the client files a complaint with the Real Estate Council of Alberta ( RECA is the regulating body in Alberta responsible to protect the consumer and regulate the industry in the province as well as issue (or suspend) licenses. They regulate: (i) realtors, (ii) mortgage agents, and (iii) appraisers…(and (iV) some residential property management).

    5) When purchasing or refinancing (or changing the terms of your mortgage), all LENDERS tend to use CMHC first and Genworth second (there are a couple others). This point is only to advise that ALL the lenders have each their own policies/guidelines to abide by, as well as those of the premium insurer (CMHC, etc). These guidelines are what keeps each persons qualifications in line with (i) income, (ii) credit, and (iii) debt servicing.

    6) If you are putting less than 20% downpayment, then every person purchasing has to abide by the guidelines and policies imposed. The GDS/TDS (aka: debt servicing) that someone speaks of the comments of 32/40…is controlled by CMHC (and other insurers). This is a rule, not a guideline. Additionally, these values are no longer in place as the government (CMHC) continues to change them and make more rules. The debt servicing ratios are applicable on various variables as discussed at the end of point #5.

    7) A mortgage agent (broker) in Alberta must pass an education certification, and be able to underwrite the file when they meet with their client. This just means that they really know their stuff and will get you the best mortgage rate and product for your current and future needs.

    8) The mortgage specialist at the “big Banks” do not underwrite as they send it to another department. In where most cases your file has to get approved by that second department, regardless of what the mortgage specialist may have told you.

    9) The so called “big Banks” all have subsidiaries (or investments…or child companies, etc), guess who they are? Some of the “small banks” or the “lenders across the country”. That is why a mortgage agent/broker will always refer to the mortgaging company as a “lender”. For example, CIBC has First Line. When a client receives a mortgage for First Line all the following corresponds has CIBC logos. Scotibank has Scotia Mortgage Authority, etc. The list goes on.

    The final point which I wish to drive home is this…there are pros and cons on both sides. I have some very amazing friends that do a fantastic job while working at the big banks. I have referred clients directly to them (TD, Scotia etc). I also have some very fantastic mortgage agent friends as well that I have referred clients to. BUT there are some very bad people on both end that should not be doing what they are doing.

    Be smart, educate yourself and interview the people that will be providing you with a mortgage. This is one of the largest financial decisions you will be making and you are providing some very personal information to them. Regardless of a “big bank” or a mortgage agent, arm yourself with questions and do what is best for you.

    An example: One of my most recent clients only saved $953 dollars by using my services on a mortgage renewal. She asked me what was the point of leaving the big bank she was at. The difference: (a) 0.05% less interest only meant $953 less payments in the next 5 years, (2) the interest versus principal back end calculation, meant that over $18,000 was shifted over from the interest to the principal. Meaning – she is able to pay down her mortgage down faster.

    Each person has a unique need. The person that ends up helping you should be working only for your best interest. Choose wisely.

    As an after thought, I have only been in this industry since 2009, and knowing what I do know, I will always use a mortgage agent/broker. Or one of my friends that was a mortgage agent/broker and now works at one of the big banks.

  22. Kyle on August 6, 2014 at 10:27 pm

    Decent points ACruz – what specific corrections are you referring to however? You seem to echo a lot of our thoughts.

  23. MtgMan on February 19, 2015 at 10:56 pm


    I agree almost entirely with your commentary, especially point #1. A mortgage is not just about the rate, but sadly consumers have been taught that a lower rate is better than a higher rate. Sounds like simple math, but a good advisor can show you how to be debt free sooner even though the competition might be offering a 0.25% to 0.5% better rate. Prepayments and or acceleration can often overcome a discount.

    I definately agree with the “shop around” mantra.

    I do however disagree with point #2. The credit score is not affected by each “hard hit” when it’s a mortgage or loan. FICO, makes an exception as they know that most consumers shop around. So any credit inquiries – for the same product (aka a mortgage) within a 30 day window will show as 1 inquiry regardless of how many “big banks” a person visits.

    Point #6 is also slightly erroneous in that the 32% Gross Debt Servicing Ratio & the 40% Total Debt Servicing Ratio are indeed guidelines that are set by the banks, not by CMHC. The banks are free to lend to a client if their ratios are slightly higher. It’s at the banks discretion to take on that risk. Generally speaking it’s a good financial practice to ensure that no more than a third of one’s gross income goes to paying for living accommodations. Likewise a further 8-10% is meant to service all other debt.

    One of the reasons that Canadians have cause for concern is that they owe $1.63 for every dollar earned. So it’s really not a good idea to exceed the guidelines set by the banks.

    It is true however that if a client does not have the 20% down payment, then they are required to pay default insurance (CMHC, Genworth, CGMI, etc…). Given that the cost of the default insurance is typically added to the mortgage, those insurers allow for higher ratios, setting the GDS/TDS at 34/42 for credit scores less than 680 and 39/44 for scores greater than 680.

    The only other point I have an issue with is the one about the score being lowered by 10 points on each hit. The credit agencies (Equifax, Trans Union, etc…) don’t divulge their algorithms and math so unless you’ve worked for them I would say it’s impossible to know the exact impact on the credit score.

    Otherwise I whole heartedly agree that consumers should be smart, educate themselves, and find a mortgage professional whom they trust and whom teaches them how to be debt free sooner. 25 years is a long time to carry debt.


  24. Danielle S on February 22, 2015 at 11:29 pm

    I don’t feel that the mortgage broker “Cons” list is accurate. I do agree that you can run into brokers that are new in the industry and may not be familiar with all products we offer (as there are a lot), but most times they are being mentored or have someone to help them with this.

    As a mortgage broker the mono-line lenders (broker channel lenders) are highly credible and worthwhile to place your mortgage with. In fact one of Canada’s top mono-line lenders has a contract to underwrite TD’s mortgages. Mono-line lenders offer superb rates, customer service and best of all lower pay-out penalties.
    In regards to getting you approved for more than you can afford…We cannot fudge your application for this. Every “A” lender has to follow government policy. We as brokers cannot push the ratios out of line to get a client approved for more. Depending on the equity in a home or the clients credit history we may be able to get acceptance if the ratios are a bit tight and the client can provide proof he/she can cover the mortgage expense. This is only done after carefully considering the clients circumstances after lender approval and is not to benefit our commission at all (or at least mine). This would be an exception made solely by the lender. This can happen at the bank as well, it’s all dependent on the file/client.

    You most definitely can complain to management if you’ve had a bad experience with a broker. After all we’re licensed under a brokerage firm, as well as follow FICOM’s guidelines, we have strict rules to adhere to.

    I would say that a broker is more times than not the better choice for most clients as it’s much easier to find a mortgage product most suited for your needs as we deal with many banks and financial institutions. We basically do the shopping for you. That being said we do have access to the lowest rates and advise clients of the great benefits of choosing a mono-line lender they would have never heard about had they gone to their bank.

  25. Paramjit S. Girn on March 30, 2015 at 11:06 am

    Nice comprehensive list of pros & cons between bank & broker channel lenders. The point one has to remember is even the broker channel lenders are governed by regulatory authorities in Canada. These lenders simply cant pick up their suitcases & leave..
    you will what i mean if you had mortgage with First Line, few years ago.
    Also its worth knowing several of these broker channel lenders are being funded by some of these major banks, SURPRISE…..!
    Despite of me being in mortgage industry, i personally will go to a broker for my mortgage because of the terms & conditions they offer. Either way how many of you actually went to your branch specifically to check on your mortgage?

    You should check them all but you better know what is your comparison criterion & what you like to accomplish in the end for yourself.

  26. Savvy Home Buyer on April 25, 2015 at 8:15 pm

    What a load. Honestly. This article is clearly contrived. Brokers can get you approved for more and with worse credit and for more money/interest saving loan products “but that may be a bad thing depending on your perspective” LOL. Ridiculous.

    Big bank’s products are carefully designed for big profits ..big period. There is no middle ground. They have fewer products, their people cycle every 2 years (so good luck with your “relationship plans”) and they cost more in every possible way.

    And PS. since the naivet

  27. Sam P on August 29, 2015 at 9:12 am

    I would like to reply from the legal profession perspective. We charge more to deal with mortgages from lenders that are more obscure. Why? The paperwork and rules and regulations are endless from these Lenders. And the writer of the article covers this – these Lenders are from Eastern Canada and typically do not have regional offices. They never meet the borrowers face to face and rely on the lawyer to confirm everything. I once ran afoul of one of these lenders because the client had not signed the back of their bank card, which they were using for ID, which incidentally, must be sent to the Lender. Everything you think they will NOT require to process the loan, will be required. Unlike the major banks, the borrowers meet a bank rep face to face, and the required paperwork for the mortgage is very easy. This saves the borrowers time and money.

  28. Kyle on August 29, 2015 at 12:41 pm

    Interesting perspective Sam. So a couple questions:

    1) How much more do you charge?
    2) How big does a lender have to be? For example, I live in Manitoba and my credit union has no problem processing everything. It is more of a small broker thing?

  29. Sam P on August 29, 2015 at 10:12 pm

    Hi Kyle – we charge a minimum of $250 more for those Lenders which we have determined to be problematic in their paperwork. While these Lenders give lesser interest rates as well, I have talked with clients and friends who say it simply isn’t worth it – for “porting” ( which is a banking term, not a legal term) and generally trying to deal with them. Credit Unions generally aren’t an issue. I’m talking about those Lenders which are based back East and have no reps other than their head office, even though they are a division of a major bank ( I don’t want to name them specifically).

  30. Kyle on August 30, 2015 at 6:34 pm

    Right. That all makes sense. Thanks for the info Sam!

  31. David Murphy on January 9, 2016 at 1:00 pm

    Very interesting thread. I myself, am I Mortgage Advisor with Cibc, and though rates are sometimes lower with smaller lenders, the expertise, dedication and unlimited resources are reasons why my wife and I continue to have our mortgage with a large institution. I need to know that there is accountability, a trust factor, and I need to be able to sit down face to face with the mortgaging company.

  32. John N. on July 18, 2016 at 3:27 pm

    @David Murphy

    “the expertise, dedication and unlimited resources are reasons why my wife and I continue to have our mortgage with a large institution. I need to know that there is accountability, a trust factor, and I need to be able to sit down face to face with the mortgaging company.”

    #1 – Mortgage salespeople who sell only one bank’s products do not have more expertise, dedication or trust than an experienced reputable broker who offers the choice of multiple lenders’ products.

    #2 – Unlimited resources are irrelevant. As a borrower you either get a good rate and contract terms or you don’t.

    #3 – Brokers are licensed and bank salespeople are not. There is WAY more accountability if consumers file a complaint with the broker regulator than with the bank’s biased branch manager or banking ombudsman.

    #4 – This is 2016. How many people want to take time off work and battle traffic to drive to a branch and be told “No?” If you need something done you pick up the phone, or smartphone if you’re a millennial.

    It is so self-serving for bankers to come on here and talk about how great their bank is just because it’s a “large institution.” Size means almost nothing if you’re a typical borrower. Look on any rate site like or and you’ll find rates that are at least 0.2% cheaper than what banks are selling. How does anything you said save me more money than an extra 0.2% rate discount?? Do tell.

  33. David on July 21, 2016 at 9:08 pm

    Feel free to call me anytime. 905 407 9726. I myself have worked both in the broker world and bank world. As a consumer and as an employee of both, I would never go the broker route. I’d say comments here are anything but self serving, as there is 0.00001% chance of getting a real commitment from a client on a website such as this. Though, I’m more than willing to spend time to educate people… so feel free to reach out.

  34. Paramjit S. Girn on July 22, 2016 at 12:15 am

    Nice & informative article.
    To add my one cent to the content, I encourage all mortgage seekers to check the way your bank calculate the penalty upon breaking your mortgage terms.
    Answer to this question will allow you to decide Which way should you go.
    Get ready to be surprised folks!

  35. Jay on August 30, 2016 at 3:38 pm

    I just found a better rate with a TD mortgage specialist than the 3 brokers I spoke with. Brokers told me it couldn’t be done. However, my request was fulfilled and rate lower. WOW! Great article. At the end of the day it matters most which individual is going to offer you the best product, rate and advice – In my case this was the bank. Cheers!

  36. Kyle on August 31, 2016 at 12:13 pm

    Glad to hear that it worked out so well for you Jay! It’s all about leverage right? If you can explain what’s out there to the lender that you’ve been with you can often get a great deal just by staying put.

  37. Allen on September 1, 2016 at 1:32 am

    Several years ago I went and saw four banks in town. Thought I was going wheel and deal. What discovered through my mortgage broker was they were all hitting my credit. I actually pulled my own credit. Sure enough my credit was hit. I was able to get my mortgage. I didn’t really care if I see the bank or not. As it was she sent my deal to local credit union because she new that if I opened an account with them my condo insurance would be 1/4 of would be anywhere else. A friend mine who was self-employed older than was trying to buy house for years banks and credit unions and even a mortgage broker turned him down. I sent him to her. And he now lives in his house. She knew of bank that would take his actual income and not CRA income and the fact he had been the same line of work for 15 years. I guess in the end there are experienced mortgage brokers and not.

  38. GTA House Poor on December 5, 2016 at 10:25 am

    I’ve come to learn that monoline lenders have limits to their maximum mortgage amount or appraised value that restrict them from lending on over $1M. Not sure why – other than know they rely more heavily on CMHC to backstop their loans than other lenders.

    Now that the average Toronto detached home is $1.35M even the average property won’t qualify for their books.

    I’ve had mortgages from a monoline lender, credit union and now a bank. Now that we’re looking for a family home in the 416 limited value in calling a broker as their channels won’t lend for what truly is an average property on an average street.

  39. moneycorgi on December 10, 2016 at 10:42 am

    I’d imagine there isn’t much difference in overall payments between the brokers and the banks. They can both see each others rates and compete accordingly.

    Once the mortgage is sorted you’re not going to have much to do with either (unless you miss payments) so as long as the plan is an affordable one I doubt it matters where it comes from.

  40. Kyle on December 11, 2016 at 11:44 am

    You’d actually be wrong in most cases MC. There are often quite large gaps between banks’ posted rates and what is available elsewhere. Now, if you’re willing to do rounds of negotiating then you probably narrow that gap substantially.

  41. elwood on January 2, 2017 at 9:33 am

    I bought my first place (condo) last year. It was really confusing at the time as a first time buyer, but because it was a new build, I had 6 months to finalize the mortgage and do some research. I asked 3 banks, then I contacted a mortgage broker who was recommended to me. The mortgage broker was so fast, I wish I had started with that avenue – but when I gave him the rates that TD was offering me, he said ‘I can’t beat that now, but call me again in 2 months just before you sign and I’ll try again’.

    Finally TD was able to get me the best rate, but because I had contacted the other banks, I learned that they have ‘refunds’ for certain professionals, etc. and I made TD give me the $1000 refund that Caisse Dejardins was offering, but I really had to push for this. In the end, when I calculated it out, the $1000 refund divided over the 4 year term ended up being equal to one or two percentage points lower (but this is because rates are insanely low and my mortgage was only for $175000).

    Conclusion: Shop around a bit, but have an honest broker.

  42. Kyle on January 3, 2017 at 10:48 am

    Glad to hear that you got a solid deal thanks to your negotiating skills Elwood! “Everything is negotiable” right?

  43. Beyza on January 9, 2017 at 3:19 pm

    Although this is an older post, people seem to still be reading it so I’ll throw in my experiences with both a bank and a broker.

    I had my first mortgage with TD, they were ok, I got a standard rate at the time, teh mortgage specialist tried to sign me up for various products which Im sure he gets a bonus from or a commission….I got my mortgage and it was a simple process. For my renewal recently’ I went with a broker, and like most have said and the article states, I got an option from a couple of different lenders I was presented with, all having much lower rates than current bank rates. One of my options was Scotiabank, and he gave me a rate that beat their rate 20 points…he stated by apparently using his commission points he reduce the rate. I didn’t know they could do that. Anyways….all in all, my agent gave me the feeling as though I was important as a client, and got me a great rate. He also reminded me that a good mortgage isn’t about rates, but also involves what’s in the terms and conditions from the lender i.e. penalties for breaking it, etc., I always recommend him, and I wont use a bank anymore.

  44. Anthony Taiwo on February 2, 2017 at 7:50 pm

    Most small brokers do not allow you to prepay your mortgage. Lets say you get some money out of moon and wanted to put on your mortgage to pay it down faster. Most big banks will allow you to do up to 20% or 10% depending on the product you sign up for.
    Also most big banks have an arrangement called porting in place. Porting is say you move out of one city due to job to another city within Canada. You can port your existing mortgage into a new property in your new city. This is not available in most small lender. So for me, if the margin in the rate different is negligible which often time is, i will go for banks…

  45. Kyle on February 3, 2017 at 10:16 am

    We’ve actually got a good article on porting here on the site Anthony. I disagree with your premise about “most small brokers”. I’ve negotiated myself a few times over the years, and have talked to several dozen people here through the site and while I agree that many small brokers won’t offer the prepays and porting features upfront – everything is negotiable!

  46. Rebecca on December 24, 2017 at 1:10 pm

    I had an absolutely terrible experience with a broker my realtor recommended. We had a 50% down payment and reasonable credit and he was talking like this was going to be a tough approval. He treated me like crap and wanted me to sign documents before he could provide details about what mortgage terms he was able to offer us. After that experience, I went into our bank and got a cheaper rate than he was offering and approved within minutes of sitting down. I don’t know if I will try another broker or not in future.

  47. Elwood on May 6, 2018 at 12:23 pm

    I bought my first place 2 years ago. At that time I didn’t know anything, but I asked three major banks for their mortgage rates for the property (which was a huge hassle of sending documents and I have learned is not a good idea because it affects your credit score each time one of the banks looks into it.). My bank offered me the lowest rate of them all. I then contacted a mortgage broker and he said he could not even meet the price my bank was offering me and advised me to take it saying it was excellent.

    I then negotiated my bank lower and asked them to pay $1000 closing costs that one of the other major banks had offered, and they did that too.

    So my experience was different than yours – my bank offered me a price lower than a mortgage broker. However, I would probably use a broker in the future just because of the hassle involved when I did it myself. It was helpful to have seen the other offers from the other banks because this gave me negotiating power when I went to sign.

  48. Eric Bowlin on June 25, 2018 at 6:35 pm

    Great breakdown. I’ve found that mortgage brokers have higher fees than most banks, and often they pad up the interest rate slightly.

    But, they are way easier to get approved with because they can shop your loan to all the different banks and lenders out there.

  49. Stewart on March 12, 2019 at 5:26 pm


    I used to be a CIBC Imperial Service advisor before becoming an indepenedant mortgage broker. You mention that banks are flexible on the 40% debt service ratio ceiling and that local employees can provide exceptions. This simply isn’t the case. And as for getting a higher approval then with a mortgage broker, you must have been working with a broker who didn’t know how to do his job.

    The debt service ratios at banks are rigid, but through a broker or even a credit union, you can get up to 44% total debt service and a larger budget. As well, all major retail banks are fairlyr estrictive in what types of income they can include, and what rental suite income you can use.

    Overall, there is no real benenfit to using a retail bank and paying higher rates other than it may feel more comfortable going into a bank. Remember, bankers are all sales agents for the banks with allot of pressure to hit targets. As much as they spend to promote a brand that represents your interest, they are simply a large sales organization looking to maximize profits at clients expense.

    I am just going to guess that you are actually a CIBC employee or dealt with a very unqualified broker.

  50. Dale on June 12, 2019 at 5:58 pm

    How come you recommend Ratehub, Young & Thrifty? They never have the best rates. Others like Ratespy are always lower 100% of the time in my experience and Ratespy has many more lenders.

    Ratehub just seems like a front for their in-house mortgage broker Canwise.

  51. Rentwell on July 15, 2019 at 12:40 am

    Thanks for sharing an informative article. I would recommend considering a broker would be a better option.

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