Does a mortgage broker cost me money?

On standard residential mortgages, the broker is paid a commission by the lender that funds the loan, so the service is typically free to you. Brokers should disclose any situation where a fee would apply.

Is a mortgage broker better than going to my bank?

A broker can compare many lenders at once, while a bank only offers its own products. That broader access can mean a better rate or an approval for a tricky application, though it is worth comparing both routes.

What is the difference between a broker and a lender?

A lender provides the actual mortgage funds, while a broker is an intermediary who shops your application to multiple lenders. The broker arranges the deal but does not supply the money.

Mortgage Glossary

What is Mortgage Broker?

A mortgage broker is a licensed professional who acts as an intermediary between borrowers and lenders, shopping your application to multiple lenders to find a suitable mortgage. Brokers do not lend money themselves; they connect you with banks, credit unions, and monoline lenders. Their service is usually free to the borrower because the lender pays them.

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Quick answer

Also known as: broker, mortgage agent

Key points

Acts as an intermediary between borrowers and many lenders.
Does not lend money; arranges the mortgage on your behalf.
Has access to lenders the public cannot approach directly.
Usually free to the borrower because the lender pays the commission.
Especially helpful for self-employed or complex applications.

Mortgage Broker explained

A mortgage broker is a licensed specialist who arranges mortgages on a borrower's behalf. Rather than offering products from a single institution, a broker has access to many lenders, including monoline lenders that the public cannot approach directly. The broker assesses your situation, submits your application to suitable lenders, and helps you compare and complete the deal.

Brokers are typically paid a commission by the lender that funds the mortgage, so their service is usually free to the borrower on standard residential deals. Because they shop multiple lenders at once, brokers can be especially valuable for borrowers with complex situations, such as self-employment or a less-than-perfect credit history, where a single bank might decline.

What a Mortgage Broker is for

A mortgage broker exists to save borrowers the time and effort of approaching lenders one by one and to widen the pool of options. By presenting a single application to many lenders, the broker creates competition for your business and can surface products and rates a borrower would not find on their own. They also guide you through qualifying and paperwork.

How it can help you

Working with a broker helps you compare more lenders with a single application, which can lead to a better rate or a product that fits an unusual situation. Brokers also know which lenders are likely to approve your profile, saving wasted applications. In the same spirit, Lenderoo compares offers from 40+ lenders for free so you can quickly see the range of options available to you.

When it comes up

A self-employed borrower with variable income struggles to satisfy a single bank's documentation rules. A mortgage broker who knows which lenders are flexible with self-employed applicants matches them to a lender that accepts their income proof, securing an approval the borrower could not get on their own.

Example: One application, many lenders

Instead of applying to four banks separately and triggering several credit checks, you give one application to a mortgage broker. The broker submits it to the lenders most likely to approve you.

Three make offers, and the broker helps you compare the rates and terms side by side. You choose the best fit, and because the funding lender pays the broker, the service costs you nothing on a standard residential deal.

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Questions & answers

Mortgage Broker: frequently asked questions

Common questions Canadians ask about mortgage broker.

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