Mortgage broker vs. bank

When you receive your mortgage renewal letter in the mail, do you sign on the dotted line or do you take the time to shop around for the best product and rate? Homeowners are becoming increasingly savvy, when it comes to shopping for a mortgage – and with good reason. Your mortgage is most likely your biggest debt, so even shaving just 0.5 per cent off your mortgage rate could pay big dividends – not only will you pay less interest, you could be mortgage-free years sooner. Let’s look at how working with a mortgage broker versus a bank can help get you there.
Mortgage Broker
For some people, shopping for a mortgage is about as fun as filing your income taxes. If you want to find the lowest mortgage rate, but don’t have the time to visit individual lenders, a mortgage broker could be the best person for you to work with. By shopping the market for mortgage products that best meet your financial goals, a mortgage broker can potentially save you both time and money. While you might not have considered lenders outside of the big banks, there are a number who offer lower rates and more generous prepayment privileges – and a mortgage broker can help connect you with them.
There’s a reason that nearly half of Canadian homeowners used the services of a mortgage broker last year. A broker acts as an intermediary between you and your lender, helping you avoid the stress of negotiations. Not only can a broker usually get you a lower rate, you’re almost certain to get a rate below what is posted. And if you’ve ever been turned down for a mortgage through traditional lenders, a broker has access to a wide variety of lenders – including trust companies, foreign banks and private lenders – all of whom they can connect you with. Even if your credit is not pristine, a broker will still try to find you a competitive mortgage product and rate.
The final bonus of working with a mortgage broker is that their services are free to you, because a mortgage broker is compensated by the lender you get your mortgage from. Knowing that, it’s important to ensure your broker matches you with the best mortgage product for meeting your financial goals. Websites like have made it easier than ever to find a mortgage broker in your area.
While we are big believers in the mortgage broker business, our goal at is to help Canadians understand that it is possible to negotiate for the best mortgage product and rate out there. If you’ve been a client with your local bank branch for many years, and have developed a good relationship with them, don’t be shy about asking for their best mortgage rate. Although your bank may not be able to match the lowest rate offered through a broker, they may be able to throw in signing bonuses like rewards points or even the cost of your appraisal. On top of that, the idea of having all of your accounts in one place is ideal for most.
No matter which route you choose, stay smart with your methods. If you feel like shopping the market yourself, by visiting multiple different lenders, it would be safe for you to only get preapproved for a mortgage with two-to-three lenders (max). Every time you get preapproved, your credit rating and score is checked – and the more times you check it in a small window of time, the more likely it is that your credit score will go down. So, do your research before you walk into each lender’s office and don’t let them preapprove you unless you truly believe you could work with them. And if you don’t have the time or energy to shop around yourself, find a mortgage broker to work for you.
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