Updated: April 2025  |  bremo.io financial guides

Mortgage Broker vs Bank in Canada

When getting a mortgage in Canada, you have two main paths: go directly to a bank or credit union, or work with a mortgage broker who shops the market on your behalf. Both can get you a mortgage. But which gets you a better deal — and when? This guide cuts through the confusion.

How a Bank Mortgage Works

When you go to your bank (TD, RBC, Scotiabank, BMO, CIBC, or a credit union), you're applying for a mortgage from a single institution. The bank's mortgage specialist works for the bank. They can offer the bank's products and rate, and they may have some discretion to negotiate — but they're limited to what their institution offers.

Advantages of going direct to a bank:

• Convenient if you already have your banking and financial accounts there
• Can sometimes bundle products (getting a discount for adding the mortgage to existing accounts)
• Physical branch access if you prefer in-person service
• Established relationship may help in complex situations

How a Mortgage Broker Works

A mortgage broker is an independent professional licensed to connect borrowers with multiple lenders. They work with dozens of lenders including big banks, credit unions, monoline lenders, and alternative lenders. You submit one application and the broker finds the best match for your situation.

Brokers are paid a finder's fee by the lender that funds your mortgage — typically 0.5-1.2% of the mortgage amount. You generally pay nothing directly to the broker for a standard mortgage.

Side-by-Side Comparison

Do Brokers Actually Get Better Rates?

Brokers often — but not always — can beat what banks offer directly. The advantages are most pronounced when:

• You're a straightforward borrower (salaried, good credit, 20%+ down) — lots of lenders want your business
• You're a complex borrower (self-employed, credit issues, alternative income) — brokers know which lenders specialize in your profile
• You're at renewal and want to switch lenders without doing the legwork yourself

Banks can sometimes match or beat broker-sourced rates when:

• You have significant assets at that institution and negotiate based on the full relationship
• The bank runs a targeted promotional rate for existing clients
• You're a particularly strong borrower and the bank's retention team is motivated

When a Broker Is Clearly Better

• Self-employed borrowers — brokers know which lenders are flexible on income documentation
• New to Canada — specialized lenders for newcomers often accessed through brokers
• Credit challenges — B lenders and alternative lenders are primarily broker-accessed
• Unique property types — rural, mixed-use, unusual construction — brokers know which lenders accept them
• First-time buyers — brokers provide education alongside the rate search

When Going Direct to a Bank May Be Fine

• You have an existing relationship and strong leverage to negotiate
• Your mortgage situation is completely standard and you've already done your rate research
• The bank is offering a specific promotion not available through brokers

Things to Ask Any Mortgage Professional

Whether you're talking to a bank's mortgage specialist or a broker:

• Is this your best rate, or is there room to negotiate?
• How is the prepayment penalty calculated if I need to break early?
• What are the prepayment privileges?
• Is this mortgage portable?
• Are there any lender fees I should know about?