Mortgage broker or bank?  Which is the best option for your mortgage?  The age-old question! While there are benefits on each side, the ultimate factors on who you should work with boil down to two things; service and the ability to access multiple options regardless of lender. Here are some considerations in determining the best fit for your family.

Do mortgage brokers charge a fee?

If you are well qualified and have verifiable income and established credit, you should not pay a fee to a mortgage broker. If you have challenges with proving your income or have a poor credit history, you will need a minimum down payment of 20% of the purchase price. In addition, you will have to pay a 1% lender fee (based on mortgage amount), and occasionally you may have to pay a broker fee.

Is it better to go through a mortgage broker or a credit union?

Mortgage brokers can access many lenders, including institutional lenders like chartered banks and credit unions. Many of these lenders offer their products to the mortgage broker channel as a business diversification strategy. You will not pay a higher rate, nor will there be any hidden or undisclosed fees when you work with a mortgage broker.

How long does the mortgage approval process take?

If all of your income and down payment documentation is ready for your mortgage broker to review, it is reasonable to have approval from a lender within two to three days. Sometimes within a day if the real estate market is not too busy in your town.

Do mortgage brokers get you better rates?

Many mortgage brokers have access to rate specials for specific products.  This happens when a lender’s investor wants to obtain more contracts for a particular mortgage product. These “deals” often don’t last long and are an excellent opportunity for borrowers. In general, there will be many similarities in rates with a few golden nuggets in the mortgage broker space.

Should you bank with your mortgage bank?

You don’t need to do your banking with the same lender who holds your mortgage. Every lender will accept pre-authorized payment for your mortgage payment, regardless of where you do your banking. There is no need to move your banking to your mortgage company. Many of the best mortgage lenders do not offer daily banking as part of their services.

How do banks rip you off?

How do I love thee? Let me count that ways! You are far more than a mortgage to a bank. You are car loans, credit cards, travel insurance, life insurance, home and automobile insurance, investment products, personal loans, and service fees. Did we miss any? You get the picture.

How do mortgage brokers rip you off?

We want to think that all mortgage brokers have their client’s best interests at heart 100% of the time. In the rarest of situations, borrowers should pay attention to the following items:

  1. A 5-year term mortgage will pay a larger commission to the mortgage broker than a lesser term. Lenders price this term more attractively than other terms. It provides predictable interest income on their book of business while allowing them to price future mortgage contracts based on fluctuating economic indicators.
  2. The detail of the mortgage broker commission is not included in your mortgage package as the current legislation in Ontario does not call for it. The lender will pay the brokerage the commission shortly after the closing date. If your mortgage broker wants to charge an additional fee, you will have to sign a letter of direction which tells your Real Estate Lawyer to collect and remit the extra cost to the brokerage. Make sure you understand everything in your signing package. When you are in doubt, have your real estate lawyer review your signing package before you sign.

Is it easier to get a mortgage with your bank?

What a great question! This is something that comes up often when considering the mortgage broker versus bank scenario.  In theory, it should be easier to get a mortgage with your current bank if you have a good income and established credit. It makes sense as they already have a financial relationship with you and access to your payment history. Unfortunately, this is not always the case. We have dealt with many clients whose banks turned down, and we could obtain competitive financing for them. Sometimes we even scratch our heads.

Do mortgage brokers do pre-approvals?

Absolutely! We love doing pre-approvals, and it gives us a better understanding of the mortgage application and our ability to obtain the correct approval for our clients.  

Are small banks better for mortgages?

Not necessarily. All lenders follow mortgage qualification guidelines set by the government, and therefore, lenders and borrowers are on the same playing field. The only exception to this rule is that some lenders may have additional flexibility with conventional mortgages (greater than 20% down payment or equity for a refinance).

Above are a few of the considerations when deciding to use a mortgage broker or a bank for your mortgage.  A Mortgage Broker provides objectivity, long-term savings, and access to a broader range of mortgage products. We also have witty personalities and flawless dance moves.  

When planning to purchase or refinance, there are lots of online resources available.  Knowing how much house you can get approved for BEFORE you go shopping and especially before you put in an offer is a great idea.  Check out our great mortgage calculator to help you understand how much mortgage you can afford.  Please download our My Mortgage Planner app – it has tons of useful information from land transfer tax estimators to online pre-approvals.  If you’d like help or more information you can email us at or book a no-obligation consultation.

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