Mortgage broker vs. going straight to the bank — what's actually different?

What can a bank show you, versus what can a broker show you?

However good the bank rep is, they can only bring you products that bank has approved and that day's rate sheet. Their job is to sell that bank's own lineup.

A mortgage broker isn't tied to one bank. Most brokers work with several banks, credit unions, and monoline lenders (companies that only do mortgages) at once. The same income and credit file can go out to a few of them, and the results get laid out side by side for you.

Does a broker cost me anything?

On most standard residential deals — the kind most people are doing when they buy, renew, or refinance — the lender pays the broker's commission, not the borrower. That's standard industry practice, not specific to any one broker.

That's not universal, though. A smaller number of situations (more complex commercial files, some private lending) can involve a fee paid directly by the borrower, and that has to be disclosed in writing before you commit to anything. Asking whether a deal will cost you anything up front is a fair question, and one you should be told the answer to without having to ask twice.

Is the bank's rate always worse than what a broker can get?

Not always — that claim doesn't hold up. A bank sometimes gives long-time customers with a lot of deposits or accounts a discount off the counter rate that a broker may not be able to match.

What a broker actually offers isn't "guaranteed cheaper," it's "several numbers side by side in one pass." Go to one bank and you see that bank's number. Go through a broker and you see a few numbers at once, and can judge for yourself which is actually better.

If one bank says no, is that the end of it?

Not necessarily. Every lender has its own underwriting guidelines — how they weigh self-employed income, a thin credit file, or being new to Canada varies a lot from one lender to the next. A file that gets declined at one bank may fit comfortably at another, or with a lender built for exactly that kind of file.

Going straight to one bank means you've only tested that one bank's guidelines. A broker with relationships across several lenders with different risk appetites can move the same file to the next one without you starting the search over yourself.

How many times do I have to submit my paperwork?

Either way, the first round of documents is roughly the same: income proof, credit report authorization, property details, source of down payment. That step doesn't go away.

The difference shows up after. Go it alone with one bank and get declined, and you're the one starting over with a new bank and a new stack of paperwork. Go through a broker and get declined, the file itself doesn't move — the broker takes it to the next lender without you resubmitting from scratch.

So what's the advantage of sticking with your own bank?

If you're already a long-time customer there — deposits, credit cards, investments all with the same bank — that bank sometimes offers a bundled rate or a faster internal approval path that a broker can't replicate.

Honestly, it isn't always one or the other. Some people compare through a broker and find their existing bank's offer already holds up — and stay there. A broker doesn't lose anything by that outcome either, since nothing was owed in the first place.

Common questions